On Thursday May 15, 2025, Ontario Minister of Finance Peter Bethlenfalvy unveiled the 2025 Budget - A Plan to Protect Ontario. Here are four key tax measures you should be aware of.
Ontario Made Manufacturing Investment Tax Credit
The Ontario government introduced the temporary Ontario Made Manufacturing Investment Tax Credit (OMMITC) as part of Ontario Budget 2023. The OMMITC is a 10 per cent refundable corporate income tax credit currently available to eligible Canadian-controlled private corporations (CCPCs) on qualifying investments in buildings, machinery and equipment for use in manufacturing or processing in the province of Ontario. The credit is worth up to $2 million a year and must be shared amongst associated corporations.
Budget 2025 proposes to increase the refundable corporate income tax credit from 10 per cent to 15 per cent for CCPCs, as well as expand eligibility of this credit to non-CCPCs (including publicly traded companies) that have a permanent establishment in Ontario. However, unlike the refundable credit made available to CCPCs, the credit available to non-CCPCs will be non-refundable. The non-refundable credit available to non-CCPCs would include a 10-year carryforward period for any unused credits.
These changes would increase the maximum annual credit from $2 million to $3 million per year. The increased tax credit would be available on eligible investments acquired and that become available for use on or after May 15, 2025 and before 2030.
The government is also proposing amendments to the OMMITC that would require a repayment of the credit where eligible capital property for which the credit was claimed is sold, converted to non-manufacturing/processing use, or removed from the province of Ontario within five years.
Ontario Fertility Treatment Tax Credit
The Ontario government is proposing a new refundable personal income tax credit for families in Ontario with eligible medical expenses related to fertility treatment, starting with the 2025 tax year.
The credit would be equivalent to 25 per cent on eligible fertility treatment expenses (including expenses related to surrogacy) up to $20,000, providing for an annual maximum tax credit of $5,000. This credit can be claimed in addition to the currently available non-refundable medical expense tax credit on the same eligible expenses.
Gas and Fuel Tax
The previous temporary gas tax rate cut of 5.7 cents per liter and the fuel (diesel) tax rate cut of 5.3 cents per liter is being made permanent, keeping the provincial rates of tax on gas and fuel to 9 cents per liter.
Deferral of Select Provincially Administered Taxes
The province is granting relief to businesses remitting taxes under 10 business-focused tax programs, including the Employer Health Tax, Insurance Premium Tax, Gasoline Tax, Fuel Tax, Mining Tax, Tobacco Tax, International Fuel Tax Agreement, Beer, Wine & Spirits Tax, the Retail Sales Tax on Insurance Contracts and Benefit Plans and the Race Tracks Tax.
For the 6-month period from April 1, 2025 to October 1, 2025, all businesses who pay taxes under any of these tax programs can defer payments to October 1, 2025 without incurring penalties and interest. However, all tax returns must still be filed on time.
To understand how these changes will impact your personal and business affairs, schedule a consultation with a Crowe Soberman Advisor.
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.
Ananth Balasingam
Partner,
Tax
Ananth Balasingam Professional Corporation
Ross Pasceri
Partner,
Tax
Rosario Pasceri Professional Corporation