The Ontario Minister of Finance, Peter Bethlenfalvy, delivered the 2023 Ontario Economic Outlook and Fiscal Review on November 2, 2023. The 2023 Ontario Economic Outlook and Fiscal Review aims to provide a better economic outlook and build upon the Ontario infrastructure. Ontario is projecting a budget deficit of $5.6 billion in 2023-2024, which is expected to decrease to $5.3 billion in the following year.
The following is a summary of the Ontario provincial government’s most relevant proposed tax measures in its 2023 Ontario Economic Outlook and Fiscal Review.
Enhancing the Ontario Harmonized Sales Tax Rebate for purpose-Built Rental Housing
In September 2023, the federal government had put forward in the House of Commons a proposal to implement a new residential rental rebate for GST purposes. To encourage the construction of more purpose-built rental housing, the Ontario government has decided to harmonize the HST on the New Residential Rental Property Rebate for the HST portion paid on certain purchases of a newly constructed residential rental property. The enhanced provincial rebate would apply to qualifying projects that begin construction on or after September 14, 2023, and on or before December 31, 2030, and complete construction by December 31, 2035. This timeframe is the same as the federal government’s enhancement.
The current rebate is equal to 75 % of the provincial portion of the HST paid, up to a maximum rebate of $24,000. To enhance the provincial portion of the HST rebate, the rebate is now equal to 100% of the provincial portion of the HST paid, with no maximum rebate amount, for qualifying new purpose-built rental housing.
Eligible new residential units would be those that qualify for the existing GST New Residential Rental Property Rebate and are in buildings with at least:
- Four private apartments, or 10 private rooms or suites; and
- Ninety per cent of residential units designated for long-term rental.
Substantial renovations of existing residential complexes would not be eligible for the enhanced rebate but would remain eligible for the existing rebate.
Enhancing the Ontario Focused Flow-Through share tax credit
To help Ontario stimulate mineral exploration in the province and increase capital investments within mining companies, the Ontario Focused Flow-Through share tax credit provides individuals with a 5% refundable tax credit of eligible Ontario expenses.
The government is proposing to enhance the credit by expanding eligibility to include specified critical mineral exploration expenditures that are eligible for the federal Critical Mineral Exploration Tax Credit and renounced on or after January 1, 2023.
Extending the Temporary Gas Tax and Fuel Tax Cuts
Since July 1, 2022, Ontario has lowered the gasoline tax by 5.7 cents per liter and the fuel tax by 5.3 cents per liter. The government is proposing to extend the rate cuts for an additional six months so the tax rate on gasoline and fuel would continue to remain at 9 cents per liter until June 30, 2024.