Provincial Budget Tax Changes for Ontario, Saskatchewan and New Brunswick

Three more provinces have released their provincial budgets throughout March and April. Neither New Brunswick’s released on March 19, nor Saskatchewan’s on March 20, included significant tax changes. However, Ontario’s new Conservative government released its highly-anticipated first budget on April 11; and it includes some tax changes that residents of the province will be happy with. Here’s the round-up:

New Brunswick provincial budget. Delivered on March 19, the budget contained no tax changes. However, the government did announce that the federal passive income rules that apply to small business corporations will not apply to provincial income taxes.

Saskatchewan provincial budget. Delivered on March 20, 2019, this budget contained only one tax-related item. Beginning in 2020, a new $3,000 non-refundable credit will be available to volunteer firefighters and volunteer first responders.

Ontario provincial budget. First, there are no new taxes for individuals or businesses in Ontario. However, the budget did introduce new tax credits and other changes designed to help families, seniors and businesses.

Tax changes for families. The most significant change for families is the proposed introduction of the Ontario Childcare Access and Relief from Expenses (CARE) tax credit, which would be claimable on the 2019 tax return.  It promises to provide 300,000 low-to-moderate income families with up to 75% relief from their eligible child care expenses, support families with incomes of up to $150,000, and help them access a broader range of child care options (including centres, home care, and camp). It’s setup to be a top up of the existing Child Care Expense Deduction (CCED) and families could receive up to $6,000 per child under seven; up to $3,750 per child between the ages of seven and 16; and up to $8,250 per child with a severe disability. To claim this credit, parents would be required to keep the receipts for the eligible child care expenses they incur. Starting with the 2021 tax year, the credit would also be available through regular advance payments during the year. 

Additionally, the budget promises to ease the tax burden for families following the death of a loved one. Effective January 1, 2020, the Estate Administration Tax would be eliminated for taxable estates with assets of $50,000 or less, and would be reduced by $250 for larger taxable estates.

Tax changes for businesses. The province proposes to introduce the Ontario Job Creation Investment Incentive, which mirrors the federal CCA measures 2018 Federal Fall Economic Statement. This incentive is designed to help businesses by increasing the CCA deduction on eligible depreciable property acquired after November 20, 2018 and available for use before 2028. The changes are as follows:

• 100% CCA deduction – in the first year that eligible manufacturing and processing equipment, and specified clean energy equipment are available for use, a 100% CCA deduction is available. are eligible for a 100% CCA deduction in the first year that it becomes available for use.
• The Accelerated Investment Incentive (AII) –  other eligible depreciable capital property is generally eligible for a maximum first-year CCA deduction on the net additions to a CCA class that is 1.5 times the standard CCA deduction for that class, subject to a maximum of 100%

The 100% CCA deduction and the AII will be phased out for property that becomes available for use after 2023 and before 2028.

Through the 2019 budget, Ontario has also pledged to introduce the following changes affecting businesses:

• Commit to cut the small business Corporate Income Tax rate by 8.7%.
• Allow small video game developers to apply for the Ontario Interactive Digital Media Tax Credit annually and get their tax credits faster.
• Review how cultural media tax credits are administered to reduce the application backlog and help companies get their tax credits faster.
• Support the reduction of the Workplace Safety and Insurance Board’s (WSIB) average premium rate from $2.35 to $1.65 on every $100 of insurable payroll, effective January 1, 2019, which will save employers an estimated $1.45 billion in 2019.
• Fight the federal government’s carbon tax, which they state will increase costs for automotive, manufacturing, transportation, mining and forestry activities, and put thousands of jobs at risk.
• Call on the federal government to press the United States administration for immediate and permanent removal of its tariffs on Canadian steel and aluminum, and to ensure that no other trade impediments such as quotas are introduced.

Changes for seniors. As of late summer 2019, low-income seniors with no benefits can receive no-cost dental care in public health units, community health centres, and Aboriginal Health Access Centres across the province. To be eligible or the program, individual seniors must have incomes of $19,300 or less, or a combined income of $32,300 for senior couples.

Knowledge Bureau Report will keep you posted as we await details of the Alberta, and Newfoundland and Labrador budgets that remain.