2023 Ontario Budget Tax Measures - Summary of Highlights 

Ahsan Qazi
Budget Summaries
| 3/23/2023

The Ontario Minister of Finance, Peter Bethlenfalvy, delivered the 2023 Budget on March 23, 2023. The 2023 Budget aims to provide a better economic outlook and build upon the Ontario infrastructure. Ontario is projecting a budget surplus of $200 million in 2024-2025, which is expected to increase to 4.4 billion in the following year. 

The following is a summary of the Ontario provincial government’s most relevant proposed tax measures in its 2023 Budget. 

Measures Affecting Businesses 

The New Ontario Made Manufacturing Investment Tax Credit  

The 2023 Ontario budget introduced the new Ontario Made Manufacturing Investment Tax Credit, a refundable tax credit offered to Canadian-Controlled Private Corpoations that make qualifying investments in buildings, machinery and equipment used in manufacturing or processing. The Ontario Made Manufacturing Investment Tax Credit is a 10% refundable credit on eligible expenditures. The credit is available for qualifying investments of up to a limit of $20 million in a taxation year per associated group and would be prorated for a short taxation year. 

Qualifying investments are expenditures for certain capital property included in Class 1 or Class 53 for capital cost allowance (CCA) purposes. Qualifying investments in Class 1 (90% of the floor space of the building must be used at the end of the corporation’s taxation year for manufacturing or processing in Ontario) include expenditures for constructing, renovating, or acquiring buildings used for manufacturing or processing in Ontario that become available for use on or after March 23, 2023. 

Qualifying investments in Class 53 include expenditures for machinery and equipment used in the manufacturing or processing of goods in Ontario. The machinery and equipment must be acquired and become available for use on or after March 23, 2023, and before 2026. 

The government would undertake a review of the credit every three years. 

People Film Production

Modernization of Ontario’s Film and Television Tax Credit 

The Ontario film and television tax credit is a refundable tax credit based on the qualifying labor expenditures incurred by a qualifying production company for eligible Ontario productions.  

In the 2022 Ontario Budget and Economic Outlook and Fiscal Review, the provincial government announced measures to modernize Ontario’s film and television tax credits. The government is continuing to work on these commitments.  

In the 2023 Ontario budget, the government extended film and television tax credit eligibility to professional film and television productions made available exclusively online. With this proposed change, Ontario intends to provide an estimated $58 million in additional support to the industry from 2022–23 to 2025–26. The government will review all comments and finalize the regulatory amendments in the coming months.

Greater Access to Small Business Income Tax Rate 

In the 2023 Ontario budget, the government proposed to lower costs for more small businesses by expanding access to the small business corporate income rate (CIT). The government is extending the range over which the benefit from the small business CIT rate is phased out. The phase‐out range is extended from between $10 million and $15 million of taxable capital to between $10 million and $50 million of taxable capital. This change mirrors the corresponding federal measure and applies retroactively to taxation years that begin on or after April 7, 2022, the same date on which the federal measure took effect.

People Wine Tasting

Other Measures 

Harmonizing Wine Tax in Response to World Trade Organization Settlement 

The government of Ontario is proposing to set a single 12% basic tax rate on wine and wine coolers sold in off‐site winery retail stores, including wine boutiques. The new rate will come into effect on July 1, 2023.  

For more information, please refer to the 2023 Ontario Budget.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.

Crowe BGK provides personalized Tax Services. With an increasingly complex world of taxation, our tax professionals will ensure you benefit from all deductions available to you.

Ahsan Qazi - Crowe BGK
Ahsan Qazi
Tax Manager

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