Transparency in Taxation, 2017

Transparency in Taxation

Tax expenditure reporting is an important element of fiscal accountability. It increases fiscal transparency by providing a comprehensive picture of forgone revenue in the tax system. As required under the Fiscal Transparency and Accountability Act, 2004, the Minister of Finance has released information about the estimated cost of expenditures made through the tax system each year, beginning in 2005, as part of the mid-year review of the fiscal plan.

Structure of the Report

This report provides the most current estimates of tax expenditures under the following:

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

Descriptions of the tax provisions listed in this report are available at:
www.fin.gov.on.ca/en/budget/fallstatement/2017/provisions.html

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.

This report includes:

  • Provincial tax reductions and exemptions administered by the Province or Ontario’s municipalities;
  • Tax expenditures that are shared with the federal government under income tax and sales tax collection agreements; and
  • Ontario-only tax expenditures administered by the federal government under those agreements.

Under the tax collection agreements, the federal government determines the tax bases for the Personal Income Tax, Corporate Income Tax and Harmonized Sales Tax. As a result, Ontario parallels federal tax expenditures associated with these tax bases. The agreements allow Ontario to implement certain measures that the federal government administers for the Province.

Not included in this report are measures that were repealed or phased out in the calendar year or are reported as expenses in the Public Accounts of Ontario. Tax expenditures that are not related to relief of taxes paid are reported as expenses in Volume 1 of the Public Accounts of Ontario. Examples of these include the Northern Ontario Energy Credit, the Ontario Political Contribution Tax Credit for individuals, the Ontario Innovation Tax Credit for corporations, and the new Ontario Seniors’ Public Transit Tax Credit.

Method

The estimates in this report were developed using the latest available taxation and economic data, forecast to the 2017 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.

Each estimate is presented on a full-year basis, which includes the full-year impact of tax provisions that took effect within the year. This approach enables a better comparison of the revenue forgone from measures that come into effect at different times in the year.

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 collectively in place. As a result, each estimate has been determined separately and cannot be added together to determine the total cost of a particular group of tax expenditures.

Tax expenditure estimates below $10 million are rounded to the nearest $1 million and estimates above $10 million are rounded to the nearest $5 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 are not currently available.

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 1a: Personal Income Tax1
Ontario Non-Refundable Tax Credits

Tax Provisions 2017 Estimates2
($ Millions)
Adoption Expense Credit s
Age Credit 330
Amounts Transferred from a Spouse or Common-Law Partner 35
Basic Personal Credit 4,635
Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) Contributions through Employment Credit 625
Ontario Caregiver Credit3 45
Charitable Donations Credit 650
Community Food Program Donation Tax Credit for Farmers s
Disability Credit 175
Eligible Dependant Credit 85
Employment Insurance (EI) Premiums Credit 180
Medical Expense Credit 185
Pension Income Credit 135
Spouse or Common-Law Partner Credit 185
Student Loan Interest Credit 6
Tuition and Education Credits 280

Table 1a Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.
[3] In 2017, the proposed Ontario Caregiver Credit would replace two credits: the Caregiver Credit and the Infirm Dependant Credit.

TABLE 1b: Personal Income Tax1
Ontario Tax Reduction (OTR)

Tax Provisions 2017 Estimates2
($ Millions)
OTR — Basic Reduction 245
OTR — Reduction for Dependent Children under 19 210
OTR — Reduction for Disabled or Infirm Dependants 25
OTR — Total 410

Table 1b Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.

TABLE 1c: Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Business

Tax Provisions 2017 Estimates2
($ Millions)

Deduction for Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) Contributions on Self-Employment and Other Earnings

50
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
 

Table 1c Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.

TABLE 1d: Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Employment

Tax Provisions 2017 Estimates2
($ Millions)
Deduction for Clergy Residence 20
Deduction of Home Relocation Loans s
Deduction for Military and Police Deployed to High-Risk International Missions 4
Deduction of Other Employment Expenses 220
Deduction of Union and Professional Dues 195
Deduction for Employee Stock Options 245
Moving Expenses Deduction 15
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
 

Table 1d Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.

TABLE 1e: Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Farming and Fishing

Tax Provisions 2017 Estimates2
($ Millions)
Items for which an Estimate is not Available
  • Cash-Basis and Flexibility in Inventory Accounting
  • Deferral of Income for Farmers
  • Net Income Stabilization Account for Farmers
 

Table 1e Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.

TABLE 1f: Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Investment

Tax Provisions 2017 Estimates2
($ Millions)
Lifetime Capital Gains Exemption for Farm or Fishing Property and Small Business Shares 340
Deduction of Allowable Business Investment Losses 5
Deduction of Carrying Charges Incurred to Earn Income 390
Deduction of Resource-Related Expenditures 30
Partial Inclusion of Capital Gains 1,465
Tax-Free Savings Accounts (TFSAs) — Non-Taxation of Investment Income3 200
Items for which an Estimate is not Available
  • Capital Gains Exemptions — $1,000 on Personal-Use Property and $200 on Foreign Exchange Transactions
  • 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, Spousal Trust or Family Trust
  • Exemption for Capital Gains Arising from Certain Donations
  • Non-Taxation of Capital Gains on Principal Residences
  • Taxation of Capital Gains upon Realization
 

Table 1f Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.
[3] Estimate represents the forgone revenue from non-taxation of investment income earned in the accounts.

TABLE 1g: Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Non-Taxable Income

Tax Provisions 2017 Estimates2
($ Millions)
Guaranteed Income Supplement and Allowance Benefits 50
Social Assistance Benefits and Provincial Supplements 40
Workers’ Compensation Benefits 120
Items for which an Estimate is not Available
  • Certain Service Pensions, Allowances, Compensation Amounts and Certain War Pensions
  • Damages with Respect to Personal Injury or Death
  • Death Benefit of up to $10,000
  • Employer-Paid CPP/QPP Contributions and EI/QPIP Premiums
  • Gifts and Bequests
  • Allowances for Diplomats and Other Government Employees Posted Abroad
  • Income of Status Indians and Indian Bands On-Reserve
  • Investment Income on Life Insurance Policies
  • Lottery and Gambling Winnings
  • Partial Inclusion of U.S. Social Security Benefits
  • Strike Pay
 

Table 1g Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.

TABLE 1h: Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Special Circumstances

Tax Provisions 2017 Estimates2
($ Millions)
Child Care Expense Deduction 220
Pension Income Splitting 310
Treatment of Spousal Support and Child Support Payments 50
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
 

Table 1h Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.

TABLE 1i: Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Tax-Deferred Savings

Tax Provisions 2017 Estimates2
($ Millions)
Registered Pension Plans (RPPs) — Deduction for Contributions 1,285
Registered Retirement Savings Plans (RRSPs) — Deduction for Contributions 2,415
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
  • RPPs — Non-Taxation of Investment Income
  • RRSPs and Registered Retirement Income Funds (RRIFs) — Non-Taxation of Investment Income
 

Table 1i Footnotes:

[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 2014 tax filer data forecast to represent the 2017 taxation year.

Personal Income Tax — Description of Changes to Tax Provisions

The following Personal Income Tax provisions have changed or been introduced since the Transparency in Taxation, 2016 report.

Ontario Changes

The Ontario tuition and education tax credits were discontinued in September 2017. Ontario students will still be able to claim the tuition amount for eligible tuition fees for studies before September 5, 2017. They will also be able to claim the education amount for months of study before September 2017. Students will continue to be able to carry forward unused amounts to claim in future years.

The proposed Ontario Caregiver Credit would replace two tax credits: the Caregiver Credit and the Infirm Dependant Credit.

Indexation

Many Ontario non-refundable tax credits and the Ontario Tax Reduction are based on amounts that are adjusted for inflation each year.

Corporate Income Tax

Estimates of tax provisions relating to the Ontario Corporate Income Tax system are presented in Table 2.

TABLE 2a: Corporate Income Tax
Ontario Deductions, Non-Refundable Tax Credits and Exemptions

Tax Provisions 2017 Estimates1
($ Millions)
Community Food Program Donation Tax Credit for Farmers s
Ontario Credit Union Tax Reduction 8
Ontario Political Contributions Tax Credit s
Ontario Research and Development (R&D) Tax Credit2 150
Ontario Resource Tax Credit 2
Ontario Small Business Deduction3 2,025
Ontario Tax Credit for Manufacturing and Processing 290

Table 2a Footnotes:

[1] Estimates are forecast to the 2017 calendar year based on preliminary tax administration data for 2016 and prior years. Estimates do not include the revenue forgone from Corporate Income Tax provisions for mutual fund corporations.
[2] Estimate is net of any recapture of the Ontario R&D Tax Credit.
[3] The cost of the Ontario Small Business Deduction is partially offset by the lower Dividend Tax Credit rate that is applied to non-eligible dividends. This offset is not included in the Ontario Small Business Deduction estimate.

TABLE 2b: Corporate Income Tax
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government

Tax Provisions 2017 Estimates1
($ Millions)
Allowable Business Investment Losses 4
Deductibility of Charitable Donations 115
Deductibility of Gifts of Cultural Property and Ecologically Sensitive Land s
Deductibility of Gifts to the Crown s
Holdback on Progress Payments to Contractors 15
Non-Taxation of Non-Profit Organizations 190
Partial Inclusion of Capital Gains 1,775
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 of Income for Farmers
  • 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
 

Table 2b Footnotes:

[1] Estimates are forecast to the 2017 calendar year based on preliminary tax administration data for 2016 and prior years. Estimates do not include the revenue forgone from Corporate Income Tax provisions for mutual fund corporations.

Corporate Income Tax — Description of Changes to Tax Provisions

The following Corporate Income Tax provisions have changed since the Transparency in Taxation, 2016 report.

Ontario Deductions, Non-refundable Tax Credits and Exemptions

Ontario Political Contributions Tax Credit – Contributions are eligible if made before January 1, 2017.  Eligible contributions made before January 1, 2017 can be carried forward up to 20 years from when the contribution was made.

Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government

Donations of Medicine for the Developing World – The federal government eliminated the additional deduction for donations of medicine made on or after March 22, 2017.

Sales and Commodity Tax

Sales Tax

Estimates of tax provisions relating to sales taxes, including the Harmonized Sales Tax and Retail Sales Tax, are presented in Tables 3 and 4.

TABLE 3a: Harmonized Sales Tax
Ontario-Specific Items
Ontario Point-of-Sale Rebates

Tax Provisions 2017 Estimates1
($ Millions)
Books 120
Children’s Car Seats/Car Booster Seats 4
Children’s Clothing 120
Children’s Diapers 30
Children’s Footwear 35
Prepared Foods and Beverages ($4 or less) 170
Print Newspapers 55
Qualifying Purchases by First Nations 40

Table 3a Footnotes:

[1] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3b: Harmonized Sales Tax
Ontario-Specific Items
Ontario Public Service Body Rebates

Tax Provisions 2017 Estimates1
($ Millions)
Hospitals, Facility Operators and External Suppliers 570
Municipalities 1,270
Public Colleges 70
Qualifying Non-Profit Organizations 65
Registered Charities 375
School Authorities 370
Universities 185

Table 3b Footnotes:

[1] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3c: Harmonized Sales Tax
Ontario-Specific Items
Other Ontario Measures

Tax Provisions 2017 Estimates1
($ Millions)
Ontario Energy and Property Tax Credit — Energy Component 450
Ontario New Housing Rebate (including new residential rental property) 1,195
Ontario Sales Tax Credit 1,300

Table 3c Footnotes:

[1] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3d: Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Business

Tax Provisions 2017 Estimates2
($ Millions)
Exemption for Ferry, Road and Bridge Tolls 15
Exemption and Rebate for Legal Aid Services 20
Foreign Convention and Tour Incentive Program 12
Rebate for Poppies and Wreaths s
Small Suppliers’ Threshold 180
Items for which an Estimate is not Available
  • Exemption for Domestic Financial Services
  • Non-Taxability of Certain Importations
  • Zero-Rating of Agricultural and Fish Products and Purchases
 

Table 3d Footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.
[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3e: Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Charities and Non-Profit Organizations

Tax Provisions 2017 Estimates2
($ Millions)
Exemption for Certain Supplies Made by Charities and Non-Profit Organizations 910

Table 3e Footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.
[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3f: Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Education

Tax Provisions 2017 Estimates2
($ Millions)
Exemption for Tuition and Education Services 550

Table 3f Footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.
[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3g: Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Health Care

Tax Provisions 2017 Estimates2
($ Millions)
Exemption for Health Care Services 575
Exemption for Hospital Parking 25
Zero-Rating of Medical and Assistive Devices 230
Zero-Rating of Prescription Drugs 580

Table 3g Footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.
[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3h: Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Households

Tax Provisions 2017 Estimates2
($ Millions)
Exemption for Child Care 120
Zero-Rating of Basic Groceries 2,660
Zero-Rating of Feminine Hygiene Products 20
Items for which an Estimate is not Available
  • Exemption for Personal Care Services
 

Table 3h Footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.
[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3i: Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Housing

Tax Provisions 2017 Estimates2
($ Millions)
Exemption for Certain Residential Rent 1,230
   Items for which an Estimate is not Available
  • Exemption for Sales of Used Residential Housing and Other Personal-Use Real Property
  • Exemption for Short-Term Accommodation (where charge is $20 or less)
 

Table 3i Footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.
[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 3j: Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Municipalities

Tax Provisions 2017 Estimates2
($ Millions)
Exemption for Municipal Transit 175
Exemption for Water, Sewage and Basic Garbage Collection Services 190

Table 3j Footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.
[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

TABLE 4: Retail Sales Tax

Tax Provisions 2017 Estimates
($ Millions)
Exemption for Automobile Insurance Premiums1 1,005
Exemption for Individual Life and Health Insurance Premiums2 660
Vendor Compensation3 3

Table 4 Footnotes:

[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.

Commodity Tax

Estimates of tax provisions relating to commodity taxes, including the Fuel Tax, Gasoline Tax, Land Transfer Tax, Tobacco Tax and Beer and Wine Tax, are presented in Table 5.

TABLE 5a: Commodity Tax
Fuel Tax

Tax Provisions 2017 Estimates
($ Millions)
Exemptions/Reduced Rates - Exemption for Coloured Fuel1 260
Exemptions/Reduced Rates - Reduced Rate for Railway Diesel2 60
Refunds - Auxiliary Power Take-Off Equipment3 4

Table 5a Footnotes:

[1] Based on tax administrative data.
[2] Forgone revenue estimated as difference from the general Fuel Tax rate.
[3] Based on refunds filed or deferrals claimed.

TABLE 5b: Commodity Tax
Gasoline Tax

Tax Provisions 2017 Estimates
($ Millions)
Exemptions/Reduced Rates - Exemption for Methanol and Natural Gas1 20
Exemptions/Reduced Rates - Reduced Rate for Aviation Fuel2 270
Exemptions/Reduced Rates - Reduced Rate for Propane2 8
Refunds - Auxiliary Power Take-Off Equipment3 s
Refunds - Aviation Fuel3 s
Refunds - Tax-Exempt Use in Unlicensed Equipment3 3

Table 5b Footnotes:

[1] Forecast for the 2017 calendar year is based on 2013 provincial Supply and Use Tables from Statistics Canada.
[2] Forgone revenue estimated as difference from the general Gasoline Tax rate.
[3] Based on refunds filed or deferrals claimed.

TABLE 5c: Commodity Tax
Land Transfer Tax

Tax Provisions 2017 Estimates
($ Millions)
Exemptions - Deferrals and Exemptions for Corporate Reorganizations1 40
Exemptions - Family Business Conveyances1 s
Exemptions - Family Farms2 15
Exemptions - Life Leases2 2
Items for which an Estimate is not Available
  • Hospital Restructurings
  • Oil/Gas Pipe Line Easements and Mineral Lands
  • Other Transfers and Dispositions
  • Reorganizations of Charities
 
Refunds - First-Time Homebuyers Refund1 260

Table 5c Footnotes:

[1] Based on refunds filed or deferrals claimed.
[2] Based on tax administrative data.

TABLE 5d: Commodity Tax
Tobacco Tax

Tax Provisions 2017 Estimates
($ Millions)
Compensation for Tax Collectors1 s

Table 5d Footnotes:

[1] Based on tax administrative data.

TABLE 5e: Commodity Tax
Beer, Wine and Spirits Tax1

Tax Provisions 2017 Estimates
($ Millions)
Exemptions/Reduced Rates - Exemption for Promotional Distribution2 2
Exemptions/Reduced Rates - Reduced Rate for Beer Made by Ontario Microbrewers3 10
Exemptions/Reduced Rates - Reduced Rate for Beer Made and Sold at Ontario Brew Pubs4 s
Exemptions/Reduced Rates - Reduced Rate for Ontario Wine and Ontario Wine Coolers5 25
Exemptions/Reduced Rates - Reduced Rate for Wine that is not Ontario Wine and not Ontario Wine Coolers6 2
Exemptions/Reduced Rates - Reduced Rate for Wine Coolers7 s
Exemptions/Reduced Rates - Reduced Rate for Spirits Coolers8 s

Table 5e Footnotes:

[1] Beer, Wine and Spirits tax applies on sales of domestic beer in the Beer Store, on-site manufacturers’ stores and licensed establishments, on wine sales in winery retail stores, and on spirits sales in distillery retail stores. Does not include sales in LCBO stores or licensed establishments where the purchase is from the LCBO.
[2] Based on estimated manufacturers’ promotional distribution.
[3] Forgone revenue estimated as difference from the basic tax on beer made by a beer manufacturer.
[4] Forgone revenue estimated as difference from the basic tax and volume tax on beer made by a beer manufacturer.
[5] Forgone revenue estimated as difference from the basic tax on wine or wine coolers that is not Ontario wine or Ontario wine coolers.
[6] Forgone revenue estimated as difference from the basic tax on wine that is not Ontario wine and not Ontario wine coolers at wine boutiques.
[7] Forgone revenue estimated as difference from the volume tax on wine.
[8] Forgone revenue estimated as difference from the volume tax on spirits.

Commodity Tax — Description of Changes to Tax Provisions

The following commodity tax provisions have changed since the Transparency in Taxation, 2016 report.

Reduced Rate for Aviation Fuel – On April 1, 2017, the tax rate on aviation fuel increased from 5.7 cents per litre to 6.7 cents per litre completing the implementation of Ontario’s 2014 Budget announcement to increase the tax rate on aviation fuel by one cent per litre each year for four years. The tax rate increases were effective September 1, 2014, April 1, 2015, April 1, 2016, and finally April 1, 2017.

First-Time Homebuyers Refund – A Land Transfer Tax refund is available for qualifying first-time purchases of new and resale homes. As of January 1, 2017, the maximum amount of the refund increased from $2,000 to $4,000.

Education Property Tax

Table 6 provides estimates of tax provisions relating to the Education Property Tax system.

TABLE 6: Education Property Tax1

Tax Provisions 2017 Estimates2
($ Millions)
Brownfields Financial Tax Incentive Program3 s
Charity Rebate 10
Conservation Land Property Tax Exemption Program 5
Eligible Convention Centres Exemption s
Eligible Live Performance Theatres Exemption and Professional Sports Facility Tax Rate Reduction 15
Farm Property Class Tax Rate Reduction 90
Farmlands Awaiting Development Subclass Tax Rate Reduction s
Heritage Property Tax Rebate s
Managed Forest Tax Incentive Program  6
Ontario Energy and Property Tax Credit –– Property Tax Component   865
Ontario Senior Homeowners’ Property Tax Grant  200
Seniors and Persons with Disabilities Property Tax Relief4 s
Tax Exemptions Under Private Statutes 5
Vacant Commercial and Industrial Unit Rebate 35
Vacant Land and Excess Land Subclass 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, The Boy Scouts Association and The 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
 

Table 6 Footnotes:

[1] Expenditures related to provincial land taxes or payments made in lieu of taxes have not been included.
[2] Estimates based on 2017 education tax rates, 2017 Assessment Roll, 2015 Municipal Financial Information Returns and municipal tax policies, unless otherwise noted.
[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 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.

Education Property Tax — Description of Changes to Tax Provisions

The following Education Property Tax provision has changed since the Transparency in Taxation, 2016 report.

The Vacant Commercial and Industrial Unit Rebate and Vacant Land and Excess Land Sub-Class Tax Rate Reduction Component are adjusted based on recent municipal decisions.

Employer Health Tax

Table 7 provides an estimate of the tax exemption for private-sector employers under the Employer Health Tax.

TABLE 7: Employer Health Tax

Tax Provisions 2017 Estimates
($ Millions)
$450,000 Exemption for Private-Sector Employers 840

Mining Tax

Estimates of tax provisions relating to the Ontario Mining Tax system are presented in Table 8.

TABLE 8: Mining Tax

Tax Provisions 2017 Estimates1
($ Millions)
Annual $500,000 Deduction s
Tax Holiday for New Mines (other than remote mines) s
Tax Holiday for New Remote Mines s
Reduced Tax Rate for Remote Mines 7
Processing Allowance 60
Item for which an Estimate is not Available
  • Fast Write-Off of Exploration Costs
 

Table 8 Footnotes:

[1] Estimates are forecast to the 2017 calendar year based on 2016 Ontario Mining Tax administration data.

Estate Administration Tax

Table 9 provides an estimate of the tax exemption for small estates under the Estate Administration Tax.

TABLE 9: Estate Administration Tax

Tax Provisions 2017 Estimates
($ Millions)
Exemption where the Value of the Estate Does Not Exceed $1,000 s

Gross Revenue Charge

Table 10 provides an estimate of the tax holiday under the Gross Revenue Charge.

TABLE 10: Gross Revenue Charge (GRC)

Tax Provisions 2017 Estimates
($ Millions)
Item for which an Estimate is not Available
  • Gross Revenue Charge 10-Year Holiday