: Ensuring Everyone Pays Their Fair Share of Taxes


Ministry of Finance

Ensuring Everyone Pays Their Fair Share of Taxes

November 17, 2014

Ontario has created a competitive and fair tax system that supports the funding of critical public services for Ontarians.

When some businesses do not pay their fair share of taxes, it puts legitimate businesses at a competitive disadvantage.

Businesses that do not pay their fair share of taxes often ignore other rules, such as protecting employees and ensuring that products and services are reliable and safe. That’s why it’s important for Ontario to ensure a level playing field for businesses and require all taxpayers to play by the rules.

Strengthening Revenue Integrity

The government is taking concrete steps to strengthen revenue integrity and in 2013–14, its efforts generated more than $380 million in additional revenue.

Some recent examples include:

  • Launching a Tender Contract Tax Compliance initiative to ensure businesses that supply the government of Ontario with products and services demonstrate that they are complying with their provincial tax obligations prior to being awarded contracts
  • Enhancing compliance activities to address the underground economy and corporate tax avoidance in Ontario through a multi-year agreement with the Canada Revenue Agency; over the four-year duration of this agreement, approximately $700 million in additional tax revenue is expected to be generated
  • Enhancing enforcement measures under the Tobacco Tax Act, including increased fines and impounding vehicles for those who break the law.

Building on its progress, Ontario is committed to moving forward with new measures, such as:

  • Launching pilot initiatives to better coordinate and strengthen compliance activities in high-risk sectors; the focus will be on strengthening consumer protection, enhancing worker safety and curtailing tax loss
  • Building on its Tender Contract Tax Compliance initiative launched in February 2014, the government will develop a plan to expand tax verification to business support programs provided by government, and procurements in the broader public sector and Crown corporations
  • Examining new methods of information sharing across government ministries
  • Monitoring and reporting on the government’s progress on these initiatives.

Need for a National Strategy

For several years, Ontario has requested that the federal government release a national strategy and action plan to address the underground economy. A clear national strategy and action plan are imperative to ensuring that compliance efforts are effectively coordinated with provinces.

Corporate Tax Avoidance

Ontario continues to work with the federal government to identify and adopt new measures to better address corporate tax avoidance.

Most recently, the Taxation Act, 2007 was amended to enhance oversight of aggressive tax avoidance transactions. The new disclosure rules are similar to those put in place by the federal government and Quebec, and will position Ontario to more effectively address egregious tax practices.

Ontario is committed to adopting best practices to ensure companies pay their fair share of tax and do not employ elaborate tax planning schemes that undermine the intent of the Province’s tax laws.

Contraband Tobacco

The low price of contraband tobacco undermines the integrity of the Tobacco Tax Act and the Smoke-Free Ontario Strategy. To address this challenge, Ontario intends to proceed with several initiatives, including establishing oversight of raw leaf tobacco effective January 1, 2015. This change will help impede the flow of raw leaf tobacco to contraband tobacco product manufacturers and address some of the concerns raised by law enforcement agencies.

Susie Heath, Minister’s Office, 416-325-3645
Scott Blodgett, Ministry of Finance, 416-325-0324

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