Tax Insights: 2024 Ontario budget – Tax highlights

Issue 2024-11

In brief

On March 26, 2024, Ontario’s Minister of Finance, Peter Bethlenfalvy, presented the province’s budget. The budget does not change corporate or personal income tax rates, but does:

• introduce new eligibility requirements for the Ontario computer animation and special effects tax credit
• expand municipalities’ authority to impose a tax on vacant homes and offer a reduced municipal property tax rate on new multi‐residential rental properties
• further extend the temporary gasoline and fuel (diesel) tax rate reductions to December 31, 2024

This Tax Insights discusses these and other tax initiatives outlined in the budget.

In detail

Business tax measures

Corporate income tax rates

Ontario’s corporate income tax rates will remain as shown in the table below. The table also shows combined federal/Ontario corporate tax rates.

Ontario computer animation and special effects (OCASE) tax credit

Effective for productions for which the qualifying corporation commences computer animation and/or special effects work after March 25, 2024, the budget removes the requirement that, for a production to be eligible for the OCASE tax credit, it must also be certified for either the Ontario film and television tax credit (OFTTC) or the Ontario production services tax credit. Instead, new eligibility rules for the OCASE tax credit will require a qualifying corporation to incur a minimum of $25,000 in Ontario labour expenditures for each film or television production for which the OCASE tax credit is claimed. Certain types of productions would be excluded from eligibility, including (but not limited to) instructional videos, music videos and gaming videos.

The budget also announces that the Ontario government will review the OFTTC regional bonus to ensure it effectively supports film and television production across the province.

Personal tax measures

Personal income tax rates

The budget does not change Ontario’s personal income tax rates. Top combined federal/Ontario personal income tax rates are shown below. These rates apply to individuals with taxable income above $246,752 in 2024 ($235,675 in 2023).

Other tax measures

Housing affordability-related measures

To help improve housing supply and affordability, the Ontario government intends to:

• extend to all single‐ and upper‐tier municipalities the authority to impose a tax on vacant homes (currently, only Toronto, Ottawa and Hamilton have this authority); a new provincial policy framework, to outline best practices for implementing a vacant home tax and which encourages municipalities to set a higher tax rate for foreign‑owned vacant homes, will be established
• take further action to strengthen Ontario’s non‑resident speculation tax with amendments to support compliance and improve fairness  
• provide municipalities with the flexibility to offer a reduced municipal property tax rate on new multi‑residential rental properties, effectively immediately

Gasoline and fuel tax

As recently announced, the budget further extends the temporary reduction in:

• gasoline tax, by 5.7¢ per litre
• fuel (diesel) tax, by 5.3¢ per litre,

so that fuel tax rates remain at 9¢ per litre until December 31, 2024. The reductions were scheduled to end on June 30, 2024.  

Alcohol taxation and fees

The budget:

• eliminates the wine basic tax that applies to sales of Ontario wine and wine coolers in on‐site winery retail stores, effective April 1, 2024
• announces a targeted review of taxes and fees on beer, wine and alcoholic beverages to help ensure a more competitive marketplace for Ontario‑based producers and consumers

Property assessment and taxation review

The budget states that a review of the province’s property assessment and taxation system is currently underway. The review will focus on fairness, affordability, business competitiveness and modernized administration tools. To maintain stability for taxpayers, the provincewide property reassessment will continue to be deferred until this review is complete.

Ontario tax system review

Based on input from consultations held over the past year, the budget states that the province’s tax system review will focus on opportunities to support greater productivity, including innovation and research, promote fairness, enable greater simplicity and transparency, and modernize administration.