Tax Highlights: 2023 Ontario Budget
Finance Minister Peter Bethlenfalvy announced Ontario’s 2023-2024 budget (ON Budget 2023) on March 23, 2023.
- No adjustments to the personal or corporate tax rates
- 10% credit on qualified investments to private corporations controlled by Canadians that have a permanent establishment in Ontario.
- Ontario is proposing a single 12% basic tax rate on wine and wine coolers sold in retail establishments other than wineries, including wine shops.
Personal Income Tax Rates 2023
Ontario’s personal income tax rates remain the same. The personal income tax rates as per budget 2023 are shown below
Corporate Income Tax Rates 2023
The combined federal and Ontario corporate tax rates are shown below
Small-business deduction
The budget confirms that Ontario is increasing the upper value of the range over which the small-business deduction is phased out from $15 million to $50 million, effective for taxation years beginning on or after 7 April 2022, paralleling the federal increase, as previously announced in the province’s fall economic statement delivered on 14 November 2022.
Ontario Made Manufacturing Investment Tax Credit 2023
The budget would provide a 10% refundable corporate income tax credit for qualified investments of up to $20 million made by eligible firms per taxation year, with a cap of $2 million per year, as was previously stated on March 22, 2023. Canadian-controlled private corporations (CCPCs) with a permanent establishment in Ontario will be eligible businesses. A connected set of corporations will split the $20 million cap, which would be prorated for short tax years.
Ontario Film and Television Tax Credits 2023
Professional film and television projects that are delivered solely online would be eligible for both the Ontario Film and Television tax credit and the Ontario production services tax credit. On February 21, 2023, the province published draught regulation revisions that will be open to public comment until April 11, 2023.
To reduce administrative complexity and maintain targeted support for professional productions with considerable cultural or economic impact, the government wants to make the Ontario computer animation and special effects tax credit simpler.
Wine Tax
Beginning on July 1, 2023, Ontario is proposing a single 12% basic tax rate on wine and wine coolers sold in retail establishments other than wineries, including wine shops. The four different basic tax rates that currently apply to off-site vineyard retail businesses would be replaced by this unified rate. This action is in response to an agreement Canada and Australia reached with the World Trade Organization.
