Ontario Economic Statement Nov 4th, 2021 - Highlights!
Issued November 4th, 2021
Ontario Staycation Tax Credit
Introducing the Ontario Staycation Tax Credit The government is proposing a new, temporary Ontario Staycation Tax Credit for the 2022 tax year. This Personal Income Tax (PIT) credit would provide Ontario residents with support of 20 per cent of eligible 2022 accommodation expenses of up to $1,000 for an individual and $2,000 for a family, for a maximum credit of $200 or $400, respectively. Ontario residents could apply for this refundable credit when they file their 2022 Personal Income Tax returns and benefit even if they do not owe any Personal Income Tax.
An eligible accommodation expense would have to be: • For a stay of less than a month at an eligible accommodation such as a hotel, motel, resort, lodge, bed-and-breakfast establishment, cottage or campground in Ontario; • For a stay between January 1 and December 31 of 2022; • Incurred for leisure (e.g., a non-business purpose); • Paid by the Ontario tax filer, their spouse or common-law partner, or their eligible child, as set out on a detailed receipt; • Not reimbursed to the tax filer, their spouse or common-law partner, or their eligible child, by any person, including by a friend or an employer; and • Subject to Goods and Services Tax (GST)/Harmonized Sales Tax (HST), as set out on a detailed receipt.
Ontario Jobs Training Tax Credit
Extending the Ontario Jobs Training Tax Credit, in the 2021 Budget, the government announced the temporary Ontario Jobs Training Tax Credit for the 2021 tax year. The government is proposing to extend this PIT credit by one year to 2022. The parameters of this credit for 2022 would be the same as for 2021. This PIT credit would be refundable to support eligible individuals whether or not they owe PIT. The credit would be calculated as 50 per cent of eligible expenses for the year. The maximum credit would be $2,000 for the year. Individuals would be able to claim the Ontario Jobs Training Tax Credit on their PIT returns for the year if they meet the following conditions: • They are resident in Ontario on December 31 of the year; and • They have a Canada training credit limit for the year that is greater than zero. An individual can find their Canada training credit limit for a tax year on their latest notice of assessment or reassessment for the previous tax year, which is provided by the Canada Revenue Agency (CRA).
To have a positive Canada training credit limit for 2022, an individual must have met income and other conditions set out in the federal Income Tax Act for at least one of 2019, 2020 or 2021. Furthermore, eligible claimants for the 2022 provincial tax credit would be at least 26 years old and not older than 65 at the end of 2022.
Eligible expenses would be the same as those that can be claimed for the Canada training
credit. These include tuition and other fees paid to an eligible educational institution in Canada for courses taken in the tax year, or fees paid to certain bodies regarding an occupational, trade or professional examination taken in the year. With this proposed extension, individuals could claim the Ontario Jobs Training Tax Credit on their 2021 and 2022 PIT returns.
Ontario Seniors’ Home Safety Tax Credit
Extending the Ontario Seniors’ Home Safety Tax Credit, in the 2020 Budget, the government announced the temporary Seniors’ Home Safety Tax Credit for the 2021 tax year. The government is proposing to extend this PIT credit by one year to 2022. The parameters of this credit for 2022 would be the same as for 2021. This credit would be refundable to support eligible individuals whether or not they owe PIT. The credit would be claimed for eligible expenses by senior homeowners and renters or people who live with senior relatives. Expenses would be eligible if they are paid or become payable in 2022 and would be for renovations that improve safety and accessibility or help a senior be more functional or mobile at home. Eligible expenses would include: • Renovations to permit a first-floor occupancy or secondary suite for a senior; • Grab bars and related reinforcements around the toilet, tub and shower; • Wheelchair ramps, stair/wheelchair lifts and elevators; • Non-slip flooring; • Additional light fixtures throughout the home and at exterior entrances; • Automatic garage door openers; and • Modular or removable versions of a permanent fixture, such as modular ramps and non-fixed bath lifts. Additional information about eligibility is set out in legislation. The Seniors’ Home Safety Tax Credit would be worth 25 per cent of up to $10,000 in eligible expenses for a senior’s principal residence in Ontario in the year. The maximum credit would be $2,500 for the year. As in 2021, the annual $10,000 maximum per household could be shared by the people who live together, including spouses and common-law partners. Individuals would claim the credit for their expenses if improvements were made to their principal residence or to a residence that they reasonably expect to become their principal residence within the 24 months following the end of the year. Also, the credit could be claimed for an individual’s share of improvements done by a condominium corporation, or similar body, to property that includes the individual’s principal residence, provided the improvements meet the eligibility conditions.
If an improvement is paid for in instalments, all expenses for that improvement would be considered to have been paid when the final instalment becomes payable. The final instalment for the improvement would have to become payable in the 2022 tax year. To claim the tax credit, seniors or their family members should save their receipts from vendors. Obtaining receipts from vendors would also help ensure that vendors report these amounts for tax purposes. With this proposed extension, individuals could claim the Seniors’ Home Safety Tax Credit on their 2021 and 2022 PIT returns.
Farm Business Support
Supporting On-Farm Businesses During consultations with the farm sector and municipalities, opportunities were identified to enhance property tax programs that support farm businesses and encourage their expansion. Based on this feedback, the Province is proposing to move forward with a number of measures. Currently, municipalities have the option of adopting a small-scale on-farm business subclass that provides a reduced tax rate on the first $50,000 of eligible assessment. The government is increasing this assessment threshold to $100,000 in order to support the establishment and expansion of on-farm value-added activities. While the Province will apply a reduced business education tax rate to this increased $100,000 threshold for all eligible properties, municipalities will have the option to maintain the current assessment threshold of $50,000 for municipal tax purposes. In addition, the following measures will be introduced: • Extend the farm property tax treatment that currently applies to the processing of maple sap to include all edible tree saps; • Increase the current limit on the property tax exemption for farm woodlots from 20 to a proposed 30 acres to keep pace with the growth of farm sizes in Ontario; and • Streamline and simplify application processes for the Farm Property Class Tax Rate Program.
Minimum Wage Increase January 1, 2022 -$15.00
Planning to introduce an increase to the general minimum wage to $15 per hour effective
January 1, 2022. This would provide higher wages for many low-income and precarious workers, who are disproportionately women.
The Ontario Deficit- Annual Numbers
The government is now projecting a $21.5 billion deficit in 2021–22. Over the medium term,
the government projects steadily declining deficits of $19.6 billion in 2022–23 and $12.9 billion in 2023–24.
Interest on Debt expense is projected to be $13.0 billion, lower than the $13.1 billion forecast
in the 2021–22 First Quarter Finances.
Ontario’s average cost of borrowing in 2021–22 is forecast to be 1.90 per cent, unchanged from the forecast in the 2021 Budget. A one percentage point change in interest rates either up or down from the current forecast is estimated to have a corresponding change in Ontario’s interest costs by approximately $0.7 billion in the first full year.
Corporate Disclosures for Privately Held Business - Coming January 1, 2023
The government is proposing that privately held business corporations would be required to collect and maintain beneficial ownership information and make it available upon request to law enforcement, tax authorities, and certain regulatory authorities including the Ontario Securities Commission, Financial Services Regulatory Authority of Ontario, and the Financial Transactions and Reports Analysis Centre of Canada. Corporations that offer securities to the public and their wholly owned subsidiaries would be exempt from the proposed information requirements. These amendments would be effective on January 1, 2023 to ensure businesses have the time to adjust to these new information requirements. The government will engage with stakeholders on the implementation of these measures to ensure they do not impose undue burden on business owners.
Corporations would need to maintain the following information on each individual with significant control. The proposed information requirements would apply to an individual, referred to as an “individual with significant control,” who:
• Owns, controls, or directs 25 per cent or more of the voting shares of the corporation or shares that are worth 25 per cent or more of the fair market value of all outstanding shares of the corporation; or
• Has direct or indirect influence over the corporation without owning at least 25 per cent of
the shares. A person would also be an individual with significant control if they own or control a significant number of shares jointly with other people. In addition, if a group of related persons collectively controls at least 25 per cent of the shares of a corporation, then each person would be an individual with significant control. A related person would include an individual and their spouse, son or daughter, or any other relative living in the same house.
Corporations would need to maintain the following information on each individual with significant control as defined above:
• Name, date of birth and address;
• Jurisdiction of residence for tax purposes;
• Date of becoming or no longer being an individual with significant control;
• A description of how the individual has significant control over the corporation, including a
description of any interests and rights in shares of the corporation; and
• A description of the steps the corporation takes to keep this information current each year.
Updates would be needed at least once during each financial year of the corporation, and within 15 days of the corporation becoming aware of a change to any relevant information.
If any questions or comments arise, please contact Peter at 905-898-3355.
Dated : November 4, 2021
Copyright © 2021 By Peter Wiesner CPA, CA
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