March 2020 Economic and Fiscal Update
As a result of the response to the COVID-19 outbreak, the government is planning for a deficit of $20.5 billion in 2020-21. The government will table a budget no later than November 15, 2020.
Summary:
- The government proposes to retroactively raise the EHT exemption from $490,000 to $1 million for 2020. The exemption would return to its current level of $490,000 on January 1, 2020. Increasing the exemption to $1 million would provide additional EHT relief of up to $9,945 per eligible employer.
- Beginning April 1, 2020, penalties and interest will not apply to Ontario’s businesses that miss any filing or remittance deadlines under select provincially administered taxes. This will continue for a period of five months, up until August 31, 2020, under the following provincially administered tax programs:
- Employer Health Tax
- Tobacco Tax
- Fuel Tax
- Gas Tax
- Beer, Wine and Spirits Tax
- Mining Tax
- Insurance Premium Tax
- International Fuel Tax Agreement
- Retail Sales Tax on Insurance Contracts and Benefit Plans; and
- Racetracks Tax
- The government is proposing to introduce a new 10 per cent refundable Corporate Income Tax credit for capital investments – the Regional Opportunities Investment Tax Credit.
- The government is postponing the planned property tax reassessment for 2021.
Ontario’s Action Plan 2020: Responding to COVID-19
Summary:
- $17 Billion in New Support in 2020-21
- $3.3 Billion Support for Health Care
- $3.7 Billion Support for People and Jobs
- $10 Billion Support for People and Businesses to Improve Cash Flow
- Some items included in the new support:
- Making electricity bills more affordable for eligible residential, farm and small business consumers through a $1.5 billion increase in electricity cost relief compared to the 2019 Budget. The government is also setting electricity prices for time-of-use customers at the lowest rate, known as the off-peak price, 24 hours a day for 45 days.
- Cutting taxes by $355 million for about 57,000 employers through a proposed temporary increase to the Employer Health Tax (EHT) exemption;
- Helping to support regions lagging in employment growth with a proposed new Corporate Income Tax credit – the Regional Opportunities Investment Tax Credit;
- Providing a five-month interest and penalty-free period to make payments for the majority of provincially administered taxes, providing $6 billion in relief to help support Ontario businesses when they need it the most;
- Providing $1.9 billion in new financial relief by the Workplace Safety and Insurance Board (WSIB) allowing employers to defer payments for a period of six months;
To read the full economic and fiscal update, please click here
To read the full Action Plan, please click here.
