Support for Ontario businesses, workers and families

The Province of Ontario has announced a series of tax changes and financial measures to build on the federal government’s COVID-19 Economic Response Plan. On March 25, 2020, Ontario’s Economic and Fiscal Update responding to COVID-19 was released to provide a $17 billion provincial package aimed at supporting Ontario families, businesses and communities in the form of income support, tax credits and deferrals.

Financial measures to support people and jobs

Ontario plans to invest $3.7 billion in support for people and jobs in response to COVID-19.

Workers

• Job-protected leave to employees in isolation or quarantine, or those caring for children because of school or daycare closures.
• Additional $100 million in funding for skills training programs.
• Finding ways to support apprentices and enable businesses to retain skilled trades workers.

Temporary doubling of the Employer Health Tax Exemption

• Employer Health Tax (EHT) exemption threshold raised to $1 million from the existing $490,000 for annual Ontario remuneration of private-sector employers with payroll under $5 million.
• Projected to provide an additional relief of up to $9,945 per eligible employer.
• Retroactive to January 1, 2020 with return to existing $490,000 threshold on January 1, 2021.

Seniors

• Double the Guaranteed Annual Income System (GAINS) maximum payment for low-income seniors for six months starting April 2020. This increases the maximum payment to $166 per month for individuals and $332 per month for couples.
• Subsidize deliveries of meals, medicines and other essentials.

Parents

• One-time payment of $200 per child up to 12 years of age and $250 for those with special needs, including children enrolled in private schools to help parents with extra costs due to the closure of schools and daycares.

Students

• The Ontario Student Assistance Program (OSAP) loan repayment and interest accrual temporarily suspended between March 30 and September 30, 2020.

Indigenous peoples

• Emergency assistance for urban Indigenous people in financial need and transportation costs for health care professional and supplies to reach remote First Nations areas.

Vulnerable people

• Support for vulnerable people such as those who are homeless, unemployed or living in poverty:
  • Expanded access to emergency assistance program to provide financial support for basic need such as food and rent during a public health emergency.
  • Enhanced funding for charitable and non-profit social service organizations such as food banks, homeless shelters, churches and emergency services.

Electricity Relief

• Setting electricity prices for residential, farm and small business customers at the off-peak price, 24 hours a day for 45 days.
• Expanded eligibility for the Low-Income Energy Assistance Program (LEAP) and extension of the ban on disconnections to July 31, 2020.

Regional Opportunities Investment Tax Credit

• To stimulate the economy in low employment regions of Ontario:
  • The Province is proposing a new 10% refundable Corporate Income Tax credit for eligible corporations making qualified investments in capital property that become available for use on or after March 25, 2020 in designated Ontario regions[1].
    • Eligible corporations include Canadian-Controlled Private Corporations (CCPCs) that construct, renovate or acquire commercial and industrial buildings belonging to Class 1 and Class 6 (i.e. buildings) for Capital Cost Allowance purposes.
    • Qualified investments are deemed to be investments with a minimum cost of $50,000 up to a limit of $500,000 in capital property that is available for use by a CCPC in the taxation year.
  • A mandatory review will be undertaken every three years to evaluate the credit for effectiveness, compliance burden and administrative costs.

Tax and other deferrals to improve cash flow

Ontario is making an additional $10 billion available to people and businesses through tax and other deferrals in order to improve cash flow. 

Interest and penalty relief

• Effective April 1, 2020 no penalty and interest will be applied to Ontario businesses on delayed filings and remittances for a period of five months (i.e. up to August 31, 2020) under the following provincially administered tax programs:
  • Employer Health Tax
  • Tobacco Tax
  • Fuel Tax
  • Gas Tax
  • Beer, Wine and Spirits Taxes
  • Mining Tax
  • Insurance Premium Tax
  • International Fuel Tax Agreement
  • Retail Sales Tax on Insurance Contracts and Benefit Plans
  • Race Tracks Tax
• Businesses are not required to notify the Ministry of Finance or provide any documentation to support their reason for a delay in filing returns or payments.

Deferred planned Property Tax reassessment

• Scheduled reassessment of property values in 2020 for the 2021 taxation year, has been deferred.
• Assessment of property tax for 2021 taxation year will continue to be based on the same valuation date as for 2020 taxation year.

Deferral of workplace safety premiums and costs

• In an added measure to help Ontario’s businesses preserve cash flow during this period, Ontario announced the six-month deferral of payments to the Workplace Safety and Insurance Board (WSIB). All employers covered by WSIB are eligible for the payment deferral.
  • Schedule 1 employers will be allowed to defer all WSIB premiums until August 31, 2020.
  • Schedule 2 employers generally pay the costs related to their workplace injury and illness claims. These employers are eligible to defer payment of these costs till August 31, 2020.
• The deferred amounts will not be subject to interest and penalties during this period.

_{[1] https://budget.ontario.ca/2020/marchupdate/annex.html#ca-2}