2021 Ontario Budget Highlights

Ontario’s Action Plan: Protecting People’s Health & Our Economy

Silvia Jacinto
Article
| 3/24/2021
2021 Ontario Budget

On Wednesday, March 24, 2021, Ontario Premier Doug Ford and Minister of Finance Peter Bethlenfalvy released Ontario’s Action Plan: Protecting People’s Health & Our Economy, focusing on protecting people's health, and supporting Ontarians and job creators who are continuing to struggle during these tough times.

Tax Measures

CARE Tax Credit Enhancement

Support for Families

In 2019, the Ontario government introduced the Ontario Childcare Access and Relief from Expenses (CARE) refundable tax credit for families with income of less than $150,000. The credit is computed as the aggregate eligible childcare expenses multiplied by a set percentage, depending on family income.

The government has proposed a temporary increase to the CARE credit for 2021 which would provide a one-time top-up of 20 per cent of the 2021 entitlement otherwise determined. On average, it is estimated that this addition will increase support to over 300,000 recipients from about $1,250 to $1,500.

Temporary Ontario Jobs Training Tax Credit

Support for Workers

The government is proposing a new temporary Ontario Jobs Training Tax Credit for 2021. This Personal Income Tax credit would be refundable, providing support to eligible individuals whether they owe income tax for 2021 or not. It would be calculated as 50 per cent of eligible expenses for 2021. The maximum credit would be $2,000.

Individuals would be able to claim the Ontario Jobs Training Tax Credit in their 2021 Personal Income Tax returns if they meet the following conditions:

  • They are resident in Ontario on December 31, 2021; and
  • They have a Canada training credit limit for 2021 greater than zero.

Expenses that qualify for this new credit are the same as those that can be claimed for the Canada training credit. These include tuition and other fees paid to an eligible educational institution in Canada for courses taken in 2021, or fees paid to certain bodies in respect of an occupation, trade or professional examination taken in 2021.

Seniors' Home Safety Tax Credit

The government is introducing the Home Safety Tax Credit for 2021, the goal of which is to assist seniors stay in their homes longer. Eligible seniors are those who are 65 years of age or older at the end of 2021 and/or people who live with seniors. This credit is worth 25 per cent of up to $10,000 of eligible renovation expenses that are paid or payable in 2021, regardless of your income or whether you owe income taxes for 2021.

Home RepairThe following expenses are eligible for this credit:

  • Grab bars and related reinforcements around the toilet, bathtub and shower
  • Wheelchair ramps
  • Stair lifts
  • Elevators
  • Renovations to permit first floor occupancy or a secondary suite for a senior

Business Support Measures

Ontario Small Business Grant

Small BusinessTo help small businesses that have been most affected by COVID-19 lockdown restrictions, Ontario is providing a second round of Ontario Small Business Support Grant payments to eligible recipients. Approximately 120,000 small businesses will automatically benefit from an additional $1.7 billion in relief through this second round of support in the form of grants of a minimum of $10,000 and up to $20,000 — bringing the estimated total support provided through this grant to $3.4 billion.

Tourism, Hospitality & Cultural Funding

TravelTo support Ontario’s tourism, hospitality and culture industries that have been among the most heavily impacted by the COVID‐19 pandemic, Ontario is investing an additional $400 million over the next three years in new initiatives to support these sectors. This additional investment builds on previously announced investments of $225 million, bringing the total to more than $625 million since the pandemic began.

Investing in Broadband

LightningTo connect homes, businesses, and communities to broadband — which COVID‐19 has demonstrated is a necessity, not a luxury — Ontario is investing $2.8 billion, bringing the province’s total investment to nearly $4 billion over six years beginning 2019–20.
 

Regional Opportunities Investment Tax Credit Enhancement

InvestmentOntario is proposing to temporarily double the Regional Opportunities Investment Tax Credit (ROITC) rate. The ROITC was introduced in 2020 as part of Ontario’s Action Plan: Response to COVID-19. The proposed enhancement would allow corporations to claim a 20 per cent credit, up from the original 10 per cent. This is a refundable Corporate income tax credit available to Canadian-controlled private corporations that make qualifying investments in eligible geographic areas of Ontario.

The credit is available for eligible expenditures in connection with investments that become available for use on or after March 24, 2020, that are in excess of $50,000 and up to $500,000 in a year.

Qualifying investments are eligible expenditures for capital property included in Class 1 and Class 6 for the purposes of calculating capital cost allowance for tax purposes, including expenditures for constructing, renovating or acquiring eligible commercial and industrial buildings and other assets.

Modernizing Anti-Avoidance Rules

Stop SignOntario is supportive of the federal government’s plan to consult on the modernization of Canada’s anti-avoidance rules, especially the General Anti-Avoidance Rule (GAAR). Ontario encourages the federal government to look at ways to end artificial income shifting and other trust or corporate structures that put provincial tax revenue at risk.

General Measures

Defeating COVID-19

COVID-19Ontario has made more than $1 billion available for a provincewide vaccination plan in the fight against COVID-19. The province also commits to making it safer to re‐engage with our workplaces, businesses, and communities with $2.3 billion for testing and contact tracing.

To protect Ontario’s frontline heroes and vulnerable people, the province has also made $1.4 billion available for personal protective equipment, including more than 315 million masks and more than 1.2 billion gloves.

Help for Hospitals

HospitalTo ensure every person who requires care in a hospital can access a bed, the government is investing an additional $5.1 billion to support hospitals since the pandemic began, adding more than 3,100 hospital beds.

Addressing the need for more health care services, Ontario is making investments to support historic hospital expansion and construction projects, including a new inpatient wing at William Osler Health System’s Peel Memorial and ongoing planning of a new regional hospital in Windsor‐Essex. The government is also investing in the creation of new children’s treatment centres in Ottawa and Chatham‐Kent to increase access to critical programs and services.

Additional Mental Health Funding

Mental HealthFor the thousands of individuals struggling with mental health and addiction issues, Ontario is providing additional funding of $175 million in 2021–22 to provide better care for those who need it.
 

Support for Long-Term Care Facilities

SeniorOntario is investing an additional $933 million over four years to support building 30,000 new long‐term care facility beds. The province is also investing $246 million over the next four years to improve living conditions in existing homes, including ensuring homes have air conditioning for residents, so that seniors can live in comfort, and with safety, dignity and respect.

Ontario is investing $4.9 billion over four years to increase the average direct daily care to four hours a day in long‐term care and hiring more than 27,000 new positions, including personal support workers (PSWs) and nurses.

In addition to traditional long‐term care development, Ontario is building four new long‐term care homes faster, through the innovative Accelerated Build Pilot Program. The program is leveraging hospital‐owned land and an expedited process for procurement and construction to increase long‐term care capacity within months.

By partnering with Trillium Health Partners, Lakeridge Health and Humber River Hospital, the Accelerated Build Pilot Program is on track to create 1,280 long‐term care beds, which will address critical shortages. Construction is underway at all three sites across the GTA, with completion planned for early 2022.

Additional Benefit Under the Ontario COVID-19 Child Benefit

Child CareTo help families who have experienced financial difficulty during the pandemic, the government is providing a third round of payments to support parents through the Ontario COVID-19 Child Benefit, totaling $1.8 billion since last March. The payment will be doubled to $400 per child for this round and $500 for each child with special needs. As a result, a family with three young children, including one with special needs will receive $2,600 in total.

Caring for People

CareTo assist survivors of domestic violence — an area that has seen a significant increase in cases during COVID‐19 — Ontario is investing an additional $2.1 million over three years to support victims of crime.

To improve the province’s collective efforts to address systemic racism, Ontario is making additional investments of $1.6 million over two years to support the Anti‐Racism and Anti‐Hate Grant program, which will support community based anti‐racism initiatives focusing on anti‐Black racism, anti‐Indigenous racism, anti‐Semitism and Islamophobia.
 

Support for Communities

TorontoTo support faith‐based and cultural organizations struggling due to financial burdens caused by COVID‐19, Ontario will be making up to $50 million available for grants to eligible organizations.

To support Ontario’s 444 municipalities, the provincial government is providing almost $1 billion in additional financial relief in 2021 to help preserve vital public services and support economic recovery.

 
This article has been prepared for the general information of our clients. Please note that this publication should not be considered a substitute for personalized advice related to your situation. 

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Silvia Jacinto
Silvia Jacinto
Partner, Tax