Highlights from the 2010 Ontario Budget - Income Tax Related Programs

About this Notice

On March 25, 2010, a number of proposed measures were announced in the 2010 Ontario Budget.

The proposals must be passed by the Legislature and receive Royal Assent to become law. This notice provides general information and is not a substitute for the legislation.

Northern Ontario Energy Credit

The 2010 Budget proposes to introduce legislation providing for a new Northern Ontario Energy Credit to recognize the higher energy costs in the north.

The government proposes to help low-to middle-income families and single people in the north with their energy costs by introducing a new permanent Northern Ontario Energy Credit. Eligible Ontarians living in northern Ontario would qualify for this refundable credit.

Northern residents who pay rent or property tax for their principal residence would be eligible for an annual credit of up to $130 for a single person and up to $200 for a family (including single parents). To target the assistance to those who need it most, the credit would be income-tested. The credit would be reduced for a single person with adjusted net income over $35,000 and eliminated when income exceeds $48,000, and reduced for families with adjusted family net income over $45,000 and eliminated when income exceeds $65,000, as shown in the Table below.

In order to provide timely assistance this year, the government is proposing an interim method of payment for 2010. Eligible northern residents would apply to the Ontario Ministry of Finance to receive the credit, which would be delivered in two instalments, in the fall of 2010 and early 2011.

In subsequent years, this permanent credit would be paid on a quarterly basis and delivered along with the proposed new Ontario Energy and Property Tax Credit.

Ontario Energy and Property Tax Credit

The government proposes to introduce legislation to convert the Ontario Property Tax Credit to the Ontario Energy and Property Tax Credit.

In the first year of implementation, the Ontario Energy and Property Tax Credit would be provided after people file their 2010 tax returns in 2011. Beginning in 2011, the credit would be paid quarterly, like the Ontario Sales Tax Credit. The government will consult with social policy groups regarding the timing of the payments to best meet the needs of people receiving the credits.

As shown in the chart below, legislated increases and proposed enhancements for 2010 would increase the energy and property tax relief provided to low- to middle-income people by 70 per cent compared to 2009.

Paralleling Federal Tax Measures

Under the terms of the Canada–Ontario Tax Collection Agreement, Ontario will automatically adopt certain 2010 federal budget Personal Income Tax and Corporate Income Tax measures and their effective dates.

These measures include proposals related to the:

• rollover of certain registered plan proceeds to a Registered Disability Savings Plan
• taxation of the Universal Child Care Benefit
• Medical Expense Tax Credit
• scholarship exemption and Education Tax Credit
• treatment of employee stock options
• deduction for U.S. Social Security benefits
• disbursement quota for charities, and
• capital cost allowance system.

More Information

Telephone

• 1 800 337-7222
• 1 800 263-7776 for teletypewriter

Written Interpretation

To obtain a written interpretation on a specific situation not addressed in this publication, please send your request in writing to:

Ministry of Finance
Advisory Services and Program Policy Branch
Income Tax Related Programs Section
33 King Street West, 3rd Floor
Oshawa ON L1H 8H5