Highlights from Ontario’s fall economic outlook

Ontario Minister of Finance Peter Bethlenfalvy released the province’s 2023 economic outlook and fiscal review on November 2, 2023.

Titled Building a Stronger Ontario Together, this year’s statement also included targeted measures to accelerate the building of critical infrastructure, attract investments, create jobs, and provide better services for Ontario residents.

Highlights of new tax measures include the following:

• No personal or business income tax rate changes.
• Enhancing the Ontario Focused Flow-Through Share Tax Credit: The current credit provides eligible individuals with a refundable tax credit of five percent of eligible Ontario expenses. Eligibility will be expanded 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.
• Enhancing the Ontario Harmonized Sales Tax (HST) Rebate for Purpose-Built Rental Housing: Ontario is proposing to enhance the New Residential Rental Property Rebate to equal 100 percent of the provincial portion of the HST paid for qualifying new purpose-built rental housing. There will be no maximum rebate amount.
  The enhancement is intended to mirror the proposed enhancements to the federal GST/HST New Residential Rental Property Rebate. Combined, these rebates will remove the full 13 percent HST on qualifying new purpose-built rental housing in Ontario. The enhanced rebate will apply to qualifying projects that begin construction between September 14, 2023, and December 31, 2030, and where construction is completed by December 31, 2035.
• Extending the Temporary Gas Tax and Fuel Tax Cuts: Ontario is introducing legislation to amend the Gasoline Tax Act and the Fuel Tax Act to extend the current rate reductions until June 30, 2024 (previously December 31, 2023). The proposed extension would keep the tax rate on gas and fuel at nine cents per litre.
• Entering into a Coordinated Vaping Product Taxation Agreement: Ontario is responding to an invitation from the federal government to enter a coordinated agreement to participate in the federal vaping tax. Under this agreement, the province will allow the federal government to levy an additional excise duty on vaping products intended for sale in Ontario. The Ontario excise duty will be at the same rate as the existing federal excise duty, and the province will receive the revenue from the additional excise duty.
• General Anti-Avoidance Rule (GAAR): Ontario has announced its intention to mirror the changes to the federal GAAR in the Taxation Act, 2007, once measures proposed by the federal government earlier this year are implemented.
• Technical Amendments: The province announced various technical amendments intended to improve administrative effectiveness or enforcement, maintain the integrity and equity of Ontario’s tax and revenue collections system, or enhance legislative clarity or regulatory flexibility to preserve policy intent.

More details and highlights of the 2023 Economic Outlook and Fiscal Review are available here.