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Tax Article

2012 Provincial Budget Summary

Published: 2012-03-29

The 2012 Ontario Budget was released yesterday. As expected, the tax related changes were limited. The following are a few proposals from the Budget that may be of interest:

1. Ontario corporate tax rate will remain at 11.5% until the budget is balanced. It was scheduled to decline to 11% effective July 1, 2012 and 10% effective July 1, 2013. We will inform you when an adjustment to future tax calculations is necessary. The Ontario small business tax rate will remain at 4.5%.

2. Further business education tax (which is part of property tax) planned reductions will not take place until the budget is balanced.

3. The Ontario Drug Benefit program will charge an increased deductible amount beginning in August 2014 for higher income seniors. Single seniors with incomes in excess of $100,000 will pay $100 + 3% of their income in excess of $100,000. Senior couples with incomes in excess of $160,000 will pay $200 + 3% of their income in excess of $160,000. The current deductible amount is $100 + $6.11 per prescription above the deductible amount. The $6.11 per prescription co-payment will also remain in effect.

4. The proposed Ontario Healthy Homes Renovation Tax Credit would be worth up to $1,500 per year, calculated as 15% of up to $10,000 in eligible home renovation expenses. Eligible expenses would allow for seniors to stay safe in their homes and/or have increased access in their homes.

5. Currently, a taxpayer may apply for refunds and rebates of Ontario RST until the time limits for claiming them have expired, or June 30, 2014, whichever is earlier. Proposed amendments would require such applications to be made on or before December 31, 2012.

6. To help mitigate the impact of tax avoidance transactions, Ontario will consider implementing various measures used by Quebec to fight aggressive tax planning in the province (disclosure of transactions).

Chris Bodnar, CA
Date updated: March 29, 2012

This information is provided by Crawford, Smith and Swallow Chartered Accountants LLP for informational purposes only and must not be relied upon as professional advice. Readers should not initiate any action on the basis of this information without the consultation and direction of a qualified professional advisor.

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