2010 Ontario Economic Outlook and Fiscal Review

Transparency in Taxation, 2010

TRANSPARENCY IN TAXATION

Tax expenditure reporting is an important element of fiscal accountability. It increases fiscal transparency by providing a complete picture of forgone revenue in the tax system.

STRUCTURE OF THE REPORT

This report provides the most current estimates of forgone revenue with respect to provisions in the following taxes:

  • Personal Income Tax
  • Corporate Income Tax
  • Sales and Commodity Tax
  • Education Property Tax
  • Employer Health Tax
  • Mining Tax
  • Estate Administration Tax
  • Gross Revenue Charge.

Included in this report are estimates of tax expenditures under Ontario’s Tax Plan for Jobs and Growth.  The tax plan, which was announced in the 2009 Budget, provides new tax relief to people and businesses and replaces the Retail Sales Tax (RST) with a Harmonized Sales Tax (HST) that is administered by the federal government.

SCOPE

Given the absence of a universally accepted definition of a “tax expenditure,” this report continues the approach adopted in previous reports of listing estimates of forgone revenue that could potentially be included under a broad-based tax system.

Under a tax collection agreement between Ontario and Canada, the federal government determines the Personal Income Tax and Corporate Income Tax bases. Similarly, under the Comprehensive Integrated Tax Coordination Agreement between Ontario and Canada, the federal government determines the HST base.  As a result, Ontario is impacted by federal tax expenditures associated with these tax bases. This report includes these tax expenditures that are shared with the federal government and Ontario-only tax credits and rebates that are administered by the federal government. Also included in the report are tax reductions and exemptions administered by the Province or Ontario’s municipalities.

Measures that were repealed or phased out in the calendar year are not included in the report. For 2010, this includes RST provisions that expired on July 1, 2010 and the elimination of the Capital Tax on July 1, 2010.

METHOD

The estimates in this report were developed using the latest available taxation or economic data, forecast to the 2010 calendar year. The data used to estimate the values of the tax provisions come from a variety of sources. The estimated value of a tax provision may differ from the amount reported in a prior year for a variety of reasons including amendments to the provision, changes in economic factors, revisions to the underlying data and improvements to the estimation method. Some tax provision estimates are particularly sensitive to economic conditions or other variables and, therefore, can fluctuate significantly from year to year.

In this year’s report, each estimate is presented on a full-year basis, regardless of when the provision came into effect.   For example, though the HST was implemented on July 1, 2010, the HST-related estimates in this report represent a full year of forgone revenue.  This approach enables a better comparison of the revenue forgone from measures that come into effect at different times in the year. Previous tax expenditure reports presented estimates only for the portion of the year that a tax provision was in place.  Hence, care must be taken when comparing this report to earlier reports. 

It is important to note that the estimates in this report are not intended to represent the potential change in revenue if the tax provisions were not in place. Each estimate has been determined separately and in isolation from other factors, such as the interactions between various tax provisions. As a result, the estimates cannot be added together to determine the total cost of a particular group of tax expenditures.

This report rounds estimates to the nearest $5 million for estimates above $10 million. Tax expenditure estimates of less than $1 million are denoted by the letter “s” (small). This report also includes tax provisions for which relevant data from the tax system are not currently available.

Future annual reports will continue to refine Ontario’s tax expenditure estimates.

PERSONAL INCOME TAX

Table 1 provides estimates of tax provisions relating to the Ontario Personal Income Tax system. Business provisions listed here are for unincorporated businesses.

Table 1
Personal Income Tax1
Tax Provisions 2010 Estimates2
($ Millions)
Ontario Non-refundable Tax Credits
Adoption Expense Credit s
Age Credit 240
Amounts Transferred from a Spouse or Common-law Partner 20
Basic Personal Credit 3,815
Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) Contributions Credit 495
Caregiver Credit 15
Charitable Donations Credit 615
Disability Credit 85
Eligible Dependant Credit3 80
Employment Insurance (EI) Premiums Credit 170
Infirm Dependant Credit 1
Medical Expense Credit3 140
Ontario Overseas Employment Tax Credit 7
Pension Income Credit 110
Spouse or Common-law Partner Credit 165
Student Loan Interest Credit 7
Tuition and Education Credits 295
Ontario Tax Reduction (OTR)
OTR — Basic Reduction 220
OTR — Reduction for Dependent Children Under 19 205
OTR — Reduction for Disabled or Infirm Dependants 15
OTR — Total 370
Ontario Labour Sponsored Investment Fund Tax Credits4
Labour Sponsored Investment Fund (LSIF) Tax Credit 7
Research Oriented Investment Fund (ROIF) Tax Credit s
Ontario Refundable Tax Credits
Ontario Focused Flow-through Share Tax Credit 2
Ontario Political Contribution Tax Credit 7
Children's Activity Tax Credit 75
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Business  
Items for Which an Estimate is not Available  
Assistance for Artists and Deduction for Canadian Art Purchased by
Unincorporated Businesses
 
Assistance for Prospectors and Grubstakers  
Deduction of Accelerated Capital Cost Allowance  
Deferral Through Use of Billed-basis Accounting by Professionals  
Employment  
Deduction for Clergy Residence 15
Deduction of Home Relocation Loans s
Deduction for Military and Police Deployed to High-risk International Missions 8
Deduction of Other Employment Expenses 280
Deduction of Union and Professional Dues 155
Employee Security Options3 180
Moving Expense Deduction 20
Northern Residents Deductions 2
Items for Which an Estimate is not Available  
Deduction for Artists and Musicians  
Deduction for Tradespersons' and Apprentice Vehicle Mechanics' Tools  
Deduction for Tuition Assistance for Adult Basic Education  
Deferral of Salary Through Leave of Absence/Sabbatical Plans  
Employee Benefit Plans  
Non-taxation of Business-paid Health and Dental Benefits  
Non-taxation of Certain Non-monetary Employment Benefits  
Special Tax Computations for Certain Retroactive Lump-sum Payments  
Farming and Fishing  
Items for Which an Estimate is not Available  
Cash-basis and Flexibility in Inventory Accounting  
Deduction of Farm Losses for Part-time Farmers  
Deferral of Income for Farmers  
Income Stabilization Account for Farmers  
Investment  
$750,000 Lifetime Capital Gains Exemption for Farm or Fishing Property and Small Business Shares 185
Deduction of Allowable Business Investment Losses 10
Deduction of Carrying Charges Incurred to Earn Income 330
Deduction of Resource-related Expenditures 70
Partial Inclusion of Capital Gains 580
Tax-Free Savings Accounts (TFSAs) – Non-taxation of Investment Income 100
Items for Which an Estimate is not Available  
Capital Gains Exemptions — $1,000 on Personal-use Property and $200 on Foreign Exchange Transactions  
Deduction of Limited Partnership Losses  
Deferral of Capital Gains Through Five-year Reserves  
Deferral of Capital Gains Through Rollovers  
Deferral of Capital Gains Through 10-year Reserves for Farm or Fishing Property and Small Business Shares  
Deferral of Capital Gains Through Transfers to a Spouse or Spousal Trust  
Exemption for Capital Gains Arising from Certain Donations  
Non-taxation of Capital Gains on Principal Residences  
Taxation of Capital Gains Upon Realization  
Non-taxable Income  
Guaranteed Income Supplement and Allowance Benefits 30
Social Assistance Benefits and Provincial Supplements 35
Workers' Compensation Benefits 175
Items for Which an Estimate is not Available  
Certain Federal Government Pensions and Allowances  
Damages With Respect to Personal Injury or Death  
Death Benefits of Up to $10,000  
Employer-paid CPP/QPP Contributions and EI Premiums  
Gifts and Bequests  
Income from the Office of the Governor General and Allowances for Diplomats and Other Government Employees Posted Abroad  
Income of Status Indians on Reserves  
Investment Income on Life Insurance Policies  
Lottery and Gambling Winnings  
Partial Inclusion of U.S. Social Security Benefits  
Strike Pay  
Special Circumstances  
Child Care Expense Deduction 190
Pension Income Splitting 220
Treatment of Spousal and Child Support Payments 40
Items for Which an Estimate is not Available  
Deduction Related to Vows of Perpetual Poverty  
Disability Supports Deduction  
Exemption of Scholarship, Fellowship and Bursary Income  
Tax-free Amount for Emergency Service Volunteers  
Tax-deferred Savings  
Registered Pension Plans (RPPs) — Deduction for Contributions 740
Registered Retirement Savings Plans (RRSPs) — Deduction for Contributions 1,940
Items for Which an Estimate is not Available  
Deferred Profit-sharing Plans  
Registered Disability Savings Plans (RDSPs) — Non-taxation of Investment Income and Federal Contributions  
Registered Education Savings Plans (RESPs) — Non-taxation of Investment Income and Federal Contributions  
Rollover of RRSP or Registered Retirement Income Fund (RRIF) Proceeds to an RDSP  
RPPs — Non-taxation of Investment Income  
RRSPs and RRIFs — Non-taxation of Investment Income  
  • 1 Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.
  • 2 Estimates are based on 2007 tax filer data forecast to represent the 2010 taxation year, unless otherwise noted.
  • 3 Estimate is also based on federal estimates for provisions that have changed since 2009.
  • 4 Estimate is based on projected sales.

PERSONAL INCOME TAX — DESCRIPTION OF TAX PROVISIONS

The following Personal Income Tax provisions have been introduced or changed since the Transparency in Taxation, 2009 report.

ONTARIO NON-REFUNDABLE TAX CREDITS

The non-refundable tax credits listed in the following table are based on amounts that are adjusted for inflation each year. The rate that applies to these and most other non-refundable tax credits has changed from 6.05 per cent to 5.05 per cent, effective January 1, 2010.

Table 2
2010 Amounts for Indexed Non-refundable Tax Credits
Non-Refundable Tax Credits
Adoption Expense Credit, maximum claim $10,911
Age Credit, maximum claim $4,366
Reduced by 15 per cent of individual's net income in excess of $32,506  
Fully phased out when individual's net income reaches $61,613  
Basic Personal Credit $8,943
Caregiver Credit, maximum claim $4,216
Reduced by dependant's net income in excess of $14,421  
Fully phased out when dependant's net income reaches $18,637  
Disability Credit $7,225
Disability supplement for individuals under 18 years of age, maximum claim $4,214
Eligible Dependant Credit, maximum claim $7,594
Reduced by dependant's net income in excess of $759  
Fully phased out when dependant's net income reaches $8,353  
Infirm Dependant Credit, maximum claim $4,215
Reduced by dependant's net income in excess of $5,992  
Fully phased out when dependant's net income reaches $10,207  
Medical Expense Credit  
Qualifying medical expenses of self, spouse or common-law partner, and dependent children in excess of the lesser of three per cent of net income and $2,024 no limit
Qualifying medical expenses of other dependants in excess of the lesser of three per cent of the dependant's net income and $2,024, maximum claim for each $10,911
Pension Income Credit, maximum claim $1,237
Spouse or Common-law Partner Credit, maximum claim $7,594
Reduced by spouse's or common-law partner's net income in excess of $759  
Fully phased out when spouse or common-law partner's net income reaches $8,353  
Tuition and Education Credits  
Education Credit, full time or eligible for Disability Credit (per month) $481
Education Credit, part time (per month) $144
Maximum transfer $6,184

ONTARIO REFUNDABLE TAX CREDITS

Children’s Activity Tax Credit — A new Children’s Activity Tax Credit has been proposed to help parents with the cost of enrolling their children in activities that encourage them to be healthy and active. Parents would be able to receive up to $50 per child (up to $100 per child with a disability) to help with the cost of these activities.

Ontario Property and Sales Tax Credits — The refundable Ontario Property and Sales Tax Credits have been replaced by two new refundable tax credits starting in 2010 — the Ontario Sales Tax Credit and the proposed Ontario Energy and Property Tax Credit. The Sales Tax Credit is reported as a Sales Tax provision in Table 4. The property tax component of the Ontario Energy and Property Tax Credit is reported as an Education Property Tax provision in Table 7. The energy component is reported as a Sales Tax measure in Table 4.

EXEMPTIONS, DEDUCTIONS, DEFERRALS AND OTHER MEASURES SHARED WITH THE FEDERAL GOVERNMENT

Ontario Non-refundable Tax Credits

Eligible Dependant Credit — Starting in 2010, single parents may elect to report the aggregate Universal Child Care Benefit they received in the year for all their children as income of the child for whom an eligible dependant credit is claimed. This change parallels the 2010 federal budget initiative.

Medical Expense Credit — The 2010 federal budget excluded expenses incurred for purely cosmetic procedures.  Cosmetic procedures will continue to qualify for the Medical Expense Tax Credit if they are required for medical or reconstructive purposes. This change applies to expenses incurred after March 4, 2010.

Employment

Employee Security Options — The 2010 federal budget proposed:

  • to prevent both the employee security option deduction and a deduction by the employer from being claimed for the same employment benefit;
  • to repeal the tax deferral election; and
  • to provide relief to taxpayers who had elected to defer the taxation of their stock option benefits until the disposition of the securities so that the tax liability on a deferred stock option benefit does not exceed the proceeds of disposition.
Non-taxable Income

Partial Inclusion of U.S. Social Security Benefits — The 2010 federal budget reinstated the 50 per cent inclusion rate for Canadian residents who have been in receipt of U.S. Social Security benefits since before January 1, 1996 and for their spouses and common-law partners who are eligible to receive survivor benefits. This measure applies to U.S. Social Security benefits received on or after January 1, 2010. Prior to this change, the inclusion rate for U.S. Social Security benefits was 85 per cent.

Tax-deferred Savings
Rollover of RRSP or Registered Retirement Income Fund (RRIF) Proceeds to an RDSP — The 2010 federal budget proposed to allow a deceased individual’s RRSP or RRIF proceeds to be transferred, on a tax-free basis, to the RDSP of a financially dependent child or grandchild with an infirmity.
 

CORPORATE INCOME TAX

Estimates of tax provisions relating to the Ontario Corporate Income Tax system are presented in Table 3.

Table 3
Corporate Income Tax
Tax Provisions 2010 Estimates1
($ Millions)
Ontario Refundable Tax Credits
Ontario Apprenticeship Training Tax Credit2 120
Ontario Book Publishing Tax Credit 4
Ontario Business Research Institute Tax Credit 8
Ontario Computer Animation and Special Effects Tax Credit 25
Ontario Co-operative Education Tax Credit2 25
Ontario Film and Television Tax Credit 110
Ontario Innovation Tax Credit 265
Ontario Interactive Digital Media Tax Credit 20
Ontario Production Services Tax Credit 155
Ontario Sound Recording Tax Credit 1
Item for Which an Estimate is not Available  
Ontario Small Beer Manufacturers’ Tax Credit  
Ontario Deductions, Non-Refundable Tax Credits and Exemptions
Ontario Credit Union Tax Reduction 5
Ontario Political Contributions Tax Credit s
Ontario Research and Development Tax Credit3 195
Ontario Resource Tax Credit 6
Ontario Small Business Deduction4 1,295
Ontario Tax Credit for Manufacturing and Processing (M&P)5 245
Ontario Tax Exemption for Commercialization s
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Allowable Business Investment Losses 1
Deductibility of Charitable Donations 95
Deductibility of Gifts of Cultural Property and Ecologically Sensitive Land 1
Deductibility of Gifts to the Crown s
Deferral of Income for Farmers s
Holdback on Progress Payments to Contractors 10
Non-taxation of Non-profit Organizations 145
Partial Inclusion of Capital Gains 465
Items for Which an Estimate is not Available  
Accelerated Write-off of Capital Assets and Resource-related Expenditures  
Cash-basis and Flexibility in Inventory Accounting  
Deductibility of Countervailing and Anti-dumping Duties  
Deferral Through Capital Gains Rollovers  
Deferral Through Use of Billed-basis Accounting by Professionals  
Donations of Medicine for the Developing World  
Exemption for Capital Gains Arising from Certain Donations  
Expensing of Advertising Costs  
Non-taxation of Provincial, Municipal and Federal Crown Corporations  
Non-taxation of Registered Charities  
Taxation of Capital Gains upon Realization  
Tax Exemption on Income of Foreign Affiliates of Canadian Corporations  
  • 1 Estimates are forecast to the 2010 calendar year based on preliminary 2008 and 2009 tax administration data, unless otherwise noted, and assume a full-year implementation of Corporate Income Tax (CIT) changes in 2010. Estimates do not include the revenue forgone from CIT provisions for mutual fund corporations.
  • 2 Estimates include the impact of both the Corporate and Personal Income Tax provisions.
  • 3 Estimate is net of any recapture of the R&D tax credit.
  • 4 The small business CIT rate was reduced from 5.5 per cent to 4.5 per cent and the Small Business Deduction Surtax was eliminated effective July 1, 2010. The estimate is based on a 12 per cent general CIT rate, a 10 per cent M&P CIT rate,  a 4.5 per cent small business CIT rate and a full phase-out of Small Business Deduction Surtax.
  • 5 Estimate is based on a M&P CIT rate of 10 per cent and a general CIT rate of 12 per cent. Under the Tax Plan for Jobs and Growth, on July 1, 2010, the M&P CIT rate was reduced to 10 per cent from 12 per cent and the general CIT rate was reduced to 12 per cent from 14 per cent.  The general CIT rate will be further reduced to 10 per cent over the next three years so that when fully implemented, Ontario will have a single CIT rate of 10 per cent. Also includes income from farming, mining, logging and fishing.

CORPORATE INCOME TAX — DESCRIPTION OF CHANGES TO TAX PROVISIONS

The following Corporate Income Tax (CIT) provisions have been introduced or changed since the Transparency in Taxation, 2009 report.

CORPORATE INCOME TAX

Ontario Refundable Tax Credits

Ontario Small Beer Manufacturers’ Tax Credit — Ontario’s Tax Plan for Jobs and Growth announced a refundable tax credit for small beer manufacturing corporations, effective July 1, 2010.  A maximum annual tax credit of $2,499,500 on eligible non-draft beer sales or $1,824,500 on eligible draft beer sales is available to qualifying corporations on sales over 50,000 hectolitres and up to 75,000 hectolitres. The tax credit is proportionally reduced when sales exceed 75,000 hectolitres and fully eliminated when sales exceed 150,000 hectolitres. A qualifying corporation is a manufacturer of beer with a permanent establishment in Ontario and whose total annual worldwide production of beer exceeds 50,000 hectolitres but does not exceed 150,000 hectolitres.

Ontario Deductions, Non-refundable Tax Credits and Exemptions

Ontario Credit Union Tax Reduction — Credit unions are eligible for a reduced CIT rate of 5.5 per cent on taxable income in excess of the income eligible for the small business deduction in order to maintain the small business rate on all credit union taxable income. 

On July 1, 2010, the small business CIT rate was reduced from 5.5 per cent to 4.5 per cent.

Ontario Political Contributions Tax Credit — A non-refundable tax credit, based on the general CIT rate, is available for eligible Ontario political contributions of up to $18,600.

On July 1, 2010, the general CIT rate was reduced from 14 per cent to 12 per cent. The general CIT rate will be further reduced to 10 per cent over the next three years.

Ontario Small Business Deduction — Canadian-controlled private corporations are eligible for a reduced CIT rate of 5.5 per cent on the first $500,000 of active business income. The Small Business Deduction Surtax of 4.25 per cent phases out the benefit of the lower rate as taxable income rises to $1,500,000.

On July 1, 2010, the small business CIT rate was reduced from 5.5 per cent to 4.5 per cent and the Small Business Deduction Surtax was eliminated.

Ontario Tax Credit for Manufacturing and Processing (M&P) — The general CIT rate is reduced by two percentage points from 14 per cent to 12 per cent  for income from M&P (including income from the generation of electricity and from the production of steam), farming, fishing, mining and logging.  

On July 1, 2010, the CIT rate on income from M&P, farming, fishing, mining, and logging was reduced from 12 per cent to 10 per cent and the general CIT rate was reduced from 14 per cent to 12 per cent.  The general CIT rate will be further reduced to 10 per cent over the next three years.

SALES AND COMMODITY TAX

SALES TAX

Estimates of tax provisions relating to sales taxes, including the Harmonized Sales Tax (HST) and Retail Sales Tax (RST), are presented in Tables 4 and 5.

Table 4
Harmonized Sales Tax
Tax Provisions 2010 Estimates1
($ Millions)
Ontario-specific Items
Ontario Point-of-Sale Exemptions
Books 160
Children’s Car Seats/Booster Seats 5
Children’s Clothing 115
Children’s Footwear 20
Feminine Hygiene Products and Diapers 25
First Nations 80
Prepared Foods and Beverages ($4 and under) 240
Print Newspapers 55
Ontario Public Service Body Rebates
Hospitals 405
Municipalities 975
Public Colleges 55
Qualifying Non-profit Organizations 70
Registered Charities 340
School Authorities 370
Universities 185
Other Ontario Measures  
Ontario Energy and Property Tax Credit (OEPTC) — Energy Component2,3 440
Ontario New Housing Rebate (including new residential rental property) 910
Ontario Sales Tax Credit (OSTC)2 1,060
Exemptions, Zero-rating and Other Measures Shared with the Federal Government
Business
Exemption for Ferry, Road and Bridge Tolls 15
Exemption and Rebate for Legal Aid Services 10
Foreign Convention and Tour Incentive Program 8
Small Suppliers’ Threshold 135
Zero-rating of High-cost Agricultural and Fishing Equipment4 s
Items for Which an Estimate is not Available  
Exemption for Domestic Financial Services5  
Non-taxability of Certain Importations6  
Charities and Non-Profit Organizations
Items for Which an Estimate is not Available  
Exemption for Certain Supplies Made by Non-profit Organizations  
Education  
Exemption for Education Services (Tuition) 335
Health Care  
Exemption for Health Care Services 510
Zero-rating of Medical Devices 105
Zero-rating of Prescription Drugs 465
Households  
Exemption for Child Care and Personal Services 95
Zero-rating of Basic Groceries 1,990
Housing
Exemption for Residential Rent (Long Term) 775
Items for Which an Estimate is not Available  
Exemption for Sales of Used Residential Housing and Other Personal-use Real Property  
Municipalities  
Exemption for Municipal Transit 125
Exemption for Water and Basic Garbage Collection Services 160
  • 1 Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.
  • 2 Estimates are based on preliminary Personal Income Tax data.
  • 3 The energy portion of the proposed Ontario Energy and Property Tax Credit is netted against sales tax revenue. See the Sales Tax - Description of Changes to Tax Provisions section for additional details.
  • 4 A large range of generally high-cost agricultural and fishing equipment is zero-rated for farmers and fishers.
  • 5 Vendors are not entitled to claim input tax credits for HST paid on inputs to exempt supplies. Final consumers and businesses do not pay direct HST on exempt goods and services.
  • 6 Certain importations are tax free including, for example, duty-free personal importations by Canadian travellers.
Table 5
Retail Sales Tax
Tax Provisions 2010 Estimates
($ Millions)
Exemption for Automobile Insurance Premiums1 870
Exemption for Individual Life and Health Insurance Premiums2 525
Vendor Compensation3 3
  • 1 Based on industry data.
  • 2 Based on insurance premiums data published by the Canadian Life and Health Insurance Association Inc.
  • 3 Based on returns filed by registered tax collectors                                         .

SALES TAX — DESCRIPTION OF CHANGES TO TAX PROVISIONS

On July 1, 2010, Ontario’s RST was replaced with the HST, a federally administered value-added tax. For detailed descriptions of the provisions, see Descriptions of the Tax Provisions. Ontario has also maintained a sales tax on certain insurance premiums and private sales of used vehicles.

In addition, the following sales tax provisions have been introduced or changed since the Transparency in Taxation, 2009 report. 

Ontario Energy and Property Tax Credit (OEPTC) — The proposed Ontario Energy and Property Tax Credit would provide relief for sales tax on energy and for property tax to low- to middle-income Ontarians who own or rent a home. For 2010, the tax credit would be provided after a 2010 tax return is filed.

Ontario Sales Tax Credit (OSTC) — The new Ontario Sales Tax Credit provides sales tax relief of up to $260 per person annually to low- to middle-income Ontarians.  The tax credit is delivered quarterly, in August, November, February and May.

COMMODITY TAX

Estimates of tax provisions relating to commodity taxes, including the Fuel Tax, Gasoline Tax, Land Transfer Tax and Tobacco Tax, are presented in Table 6.

Table 6
Commodity Tax
Tax Provisions 2010 Estimates
($ Millions)
Fuel Tax
Exemptions/Reduced Rates
Exemption for Biodiesel1 6
Exemption for Coloured Fuel2 285
Reduced Rate for Railway Diesel3 60
Refunds
Auxiliary Power Take-off Equipment4 6
Gasoline Tax
Exemptions/Reduced Rates
Exemption for Methanol and Natural Gas5 10
Reduced Rate for Aviation Fuel6 275
Reduced Rate for Propane6 5
Refunds
Auxiliary Power Take-off Equipment4 s
Aviation Fuel4 s
Tax-exempt Use in Unlicensed Equipment4 4
Land Transfer Tax
Exemptions
Deferrals and Exemptions for Corporate Reorganizations4 45
Family Business Conveyances4 s
Family Farms2 5
Life Leases2 s
Items for Which an Estimate is not Available  
Hospital Restructuring  
Oil/Pipeline Easements and Mineral Lands  
Other Transfers and Dispositions  
Reorganization of Charities   
Refunds
Refund for First-time Home Buyers4 170
Tobacco Tax
Compensation for Tax Collectors7 s
  • 1 Based on estimated amount of biodiesel sold in Ontario.
  • 2 Based on tax administration data.
  • 3 Forgone revenue estimated as difference from the general fuel tax rate.
  • 4 Based on refunds filed or rebates/deferrals claimed.
  • 5 Forecast for the 2010 calendar year is based on preliminary 2006 provincial Input–Output tables from Statistics Canada.
  • 6 Forgone revenue estimated as difference from the general gasoline tax rate.
  • 7 Based on returns filed by registered tax collectors.

COMMODITY TAX — DESCRIPTION OF TAX PROVISIONS

The following Commodity Tax provision has been introduced or changed since the Transparency in Taxation, 2009 report.

LAND TRANSFER TAX (LTT)

Exemptions

Reorganization of Charities — The 2010 Budget announced that transfers of land, occurring after March 25, 2010, between registered charities (from either a trust or a non-share capital corporation to a non-share capital corporation) that carry on the same charitable purpose are exempt from LTT provided the transfer results solely from an internal reorganization.

EDUCATION PROPERTY TAX

Table 7 provides estimates of tax provisions relating to the Education Property Tax system.

Table 7
Education Property Tax1
Tax Provisions 2010 Estimates2
($ Millions)
Brownfields Financial Tax Incentive Program3 s
Charity Rebate 9
Conservation Land Property Tax Exemption Program 3
Eligible Convention Centres Exemption s
Eligible Live Performance Theatres Exemption and Professional Sports Facility Tax Rate Reduction 10
Farm Property Class Tax Rate Reduction 65
Farmlands Awaiting Development Sub-class Tax Rate Reduction s
Heritage Property Tax Rebate s
Managed Forest Tax Incentive Program 3
Ontario Energy and Property Tax Credit (OEPTC) — Property Tax Component4,5 835
Seniors and Persons with Disabilities Property Tax Relief6 s
Tax Exemptions Under Private Statutes 6
Vacant Commercial and Industrial Unit Rebate 30
Vacant Land and Excess Land Sub-class Tax Rate Reduction 50
Items for Which an Estimate is not Available
Other Tax Exemptions Under Public Statutes
Discretionary exemptions granted by municipalities to special purpose properties (e.g., legions, navy leagues, public–private capital facilities)
Mandatory exemptions granted to special purpose/institutional properties    (e.g., places of worship, cemeteries, Boy Scouts Association of Canada and Canadian Girl Guides Association, charitable institutions including Canadian Red Cross, St. John Ambulance and charitable, non-profit philanthropic             corporations organized for the relief of the poor)
Relief from Property Taxes That Are Unduly Burdensome for Residential, Farm or Managed Forest Properties
  • 1 Expenditures related to provincial land taxes or payments made in lieu of taxes have not been included.
  • 2 Estimates based on 2010 education tax rates, 2010 Assessment Roll, 2008 Municipal Financial Information Returns and municipal tax policies.
  • 3 Effective October 1, 2004, municipalities may pass bylaws cancelling municipal property taxes on eligible brownfields properties. The Province may match the municipal reduction with an education property tax reduction.
  • 4 Estimate also based on Personal Income Tax data.
  • 5 The property tax portion of the proposed Ontario Energy and Property Tax Credit is netted against Education Property Tax revenues. See the Sales Tax - Description of Changes to Tax Provisions section for additional details.
  • 6 Estimate does not include expenditures due to the exemption from taxation on 10 per cent of the assessment of improvements to accommodate seniors and persons with disabilities in newly built homes or the expenditure on such improvements in existing homes.

EMPLOYER HEALTH TAX

Table 8 provides an estimate of the tax exemption under the Employer Health Tax.

Table 8
Employer Health Tax (EHT)
Tax Provision 2010 Estimate
($ Millions)
$400,000 Exemption for Private-sector Employers1 665
  • 1 Estimate is based on 2007 remuneration data forecast to represent the 2010 taxation year.

MINING TAX

Estimates of tax provisions relating to the Ontario Mining Tax system are presented in Table 9.

Table 9
Mining Tax1
Tax Provision 2010 Estimate
($ Millions)
Mining Tax Exemption s
Mining Tax Holiday for Mines (other than remote mines) s
Mining Tax Holiday for New Remote Mines s
Mining Tax Rate for Remote Mines s
Processing Allowance 15
Item for Which an Estimate is not Available  
Fast Write-off of Exploration Costs  
  • 1 Estimates are forecast to the 2010 calendar year based on 2009 Ontario Mining Tax administration data.

ESTATE ADMINISTRATION TAX

Table 10 provides an estimate of an exemption under the Estate Administration Tax.

Table 10
Estate Administration Tax
Tax Provision 2010 Estimate
($ Millions)
Exemption Where the Value of the Estate Does Not Exceed $1,000 s

GROSS REVENUE CHARGE

Table 11 provides an estimate of the tax holiday under the Gross Revenue Charge.

Table 11
Gross Revenue Charge (GRC)1
Tax Provision 2010 Estimate
($ Millions)
Gross Revenue Charge 10-year Holiday s
  • 1 Expenditure does not include the provincial water rental portion of the GRC.