4 Highlights from Ontario’s Fall Economic Statement

| 11/4/2021
2021 Fall Economic Statement

On Thursday, November 4, 2021Ontario Premier Doug Ford and Minister of Finance Peter Bethlenfalvy published the 2021 Ontario Economic Outlook and Fiscal Review: Build Ontariobuilding the foundation for economic growth through critical infrastructure, supporting workers, and creating the right environment to attract investment and jobs.

The article summarizes the four tax related measures announced today.

Ontario Staycation Tax Credit

StaycationThe Ford government is proposing a new temporary Ontario Staycation Tax Credit (“OSTC”) for the 2022 taxation year. This will be a personal refundable tax credit computed as 20 per cent of eligible accommodation expenses in Ontario. The maximum amount of expenses on which the credit will apply is $1,000 for an individual and $2,000 for a family. Individuals can claim this credit on their 2022 personal tax returns.

Eligible accommodation expenses will include the following:

  • For a stay of less than a month at an eligible accommodation such as a hotel, motel, resort, lodge, bed-and-breakfast establishment, cottage or campground in Ontario;
  • For a stay between January 1 and December 31 of 2022;
  • Incurred for leisure (e.g., a non-business purpose);
  • Paid by the Ontario tax filer, their spouse or common-law partner, or their eligible child, as set out on a detailed receipt;
  • Not reimbursed to the tax filer, their spouse or common-law partner, or their eligible child, by any person, including by a friend or an employer; and
  • Subject to Goods and Services Tax (“GST”)/Harmonized Sales Tax (“HST”), as set out on a detailed receipt.

Extension of Ontario Jobs Training Tax Credit

Job TrainingIn the 2021 Ontario Budget, the Ford government proposed a temporary new Ontario Jobs Training Credit (“OJTC”). Today’s Economic Update proposes to extend the credit by one year to 2022.

The OJTC is computed as 50 per cent of eligible expenses to a maximum credit of $2,000 for the year and is available to individuals who meet the following criteria:

  • They are resident in Ontario on December 31 of the year; and
  • They have a Canada training credit limit for the year that is greater than zero.

An individual can access their Canada training credit limit on their most recent notice of assessment or reassessment issued by the CRA for the previous tax year.

To be eligible for the 2022 OJTC, an eligible individual must be at least 26 years old and not older than 65 at the end of the year.

Eligible expenses on which the OJTC is computed are the same as those that can be claimed for the federal Canada training credit and include tuition and other fees paid to an eligible education institution in Canada for courses taken the in the tax year, or fees paid to certain regulatory bodies in respect of an occupation, trade or professional examination taken in the year.

Extension of Ontario Seniors’ Home Safety Tax Credit

SeniorIn the 2020 Ontario Budget, the provincial government introduced the temporary Seniors’ Home Safety Tax Credit (“SHSTC”). Today, the government proposes to extend this credit by one year to 2022.

The conditions and limitations in respect of the SHSTC, a refundable 25 per cent tax credit, are the same as those for 2021. The credit is computed on eligible expenses of up to $10,000 per year, and available to senior homeowners and renters or people who live with senior relatives. These expenses can be shared by the people who live together, including spouses and common-law partners.

The maximum SHSTC is $2,500 for the tax year.

Eligible expenses on which the credit is computed include the following:

  • Renovations to permit a first-floor occupancy or secondary suite for a senior;
  • Grab bars and related reinforcements around the toilet, tub and shower;
  • Wheelchair ramps, stair/wheelchair lifts and elevators;
  • Non-slip flooring;
  • Additional light fixtures throughout the home and at exterior entrances;
  • Automatic garage door openers; and
  • Modular or removable versions of a permanent fixture, such as modular ramps and non-fixed bath lifts.

The above expenses must be paid or become payable in 2022 and incurred for renovations that improve safety and accessibility or help a senior be more functional or mobile at home. By home, the government means the individual’s principal residence or a residence that they can reasonably expect will become their principal residence within 24 months following the end of the particular claim year.

An individual could claim the credit for their share of improvements done by a condominium corporation, or similar body, to property that includes the individual’s principal residence, to the extent that the improvements meet the eligibility conditions.

Individuals should retain receipts for eligible expenses.  

Fighting Financial Crimes and Tax Evasion

CrimesThe government is proposing amendments to the Business Corporations Act to introduce beneficial ownership information requirements, the purposes of which are to prevent and better detect the use of corporations for tax evasion, money laundering or other illicit financial activities. These amendments will put Ontario on equal footing with most other Canadian jurisdictions.

These measures would require that private corporations collect and maintain beneficial ownership information and make it available upon request to law enforcement, tax authorities and certain regulatory bodies including the Ontario Securities Commission, Financial Services Regulatory Authority of Ontario, and the Financial Transactions and Reports Analysis Centre of Canada.

These amendments would be effective January 1, 2023, to ensure sufficient time for the affected companies to adjust and comply. The government also said that it would engage in discussions with stakeholders to ensure the information requirements do not pose undue burden on business owners.

Other details:

  • The proposed information requirements would apply to an individual with “significant control” who:
    • Owns, controls, or directs 25 per cent or more of the voting shares of the corporation or shares that are worth 25 per cent or more of the fair market value of all outstanding shares of the corporation; or
    • Has direct or indirect influence over the corporation without owning at least 25 per cent of the shares.
  • A person would also be considered an individual with “significant control” if they own or control a significant number of shares jointly owned by other people, including related individuals.
  • In addition, if a group of related persons collectively controls at least 25 per cent of the shares of a corporation, then each person would be an individual with significant control.
  • A related person would include an individual and their spouse, son or daughter, or any other relative living in the same house.

Corporations would be required to maintain the following information in respect of individuals with “significant control”:

  • Name, date of birth and address;
  • Jurisdiction of residence for tax purposes;
  • Date of becoming or no longer being an individual with significant control;
  • A description of how the individual has significant control over the corporation, including a description of any interests and rights in shares of the corporation; and
  • A description of the steps the corporation takes to keep this information current each year.

Updates would be required at least once during each financial year of the corporation, and within 15 days of the corporation becoming aware of a change to any relevant information.

Watch more here.

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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Adam Scherer
Managing Partner
Adam Scherer Professional Corporation