Ontario 2024 Budget Highlights

Ontario Minister of Finance Peter Bethlenfalvy tabled the province’s 2024 budget on Tuesday, March 26, 2024. This year’s budget, titled Building a Better Ontario, includes investments in workers and key public services without raising taxes or fees. The province is continuing to deliver on its “Plan to Build” by investing in infrastructure to get more homes built faster and help keep costs down for families and businesses.

Corporate income tax measures

Corporate income tax rates

No new corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2024 are summarized below:

M&P – Manufacturing & Processing

* Rates applicable to income not eligible for the temporary rate reduction for manufacturers of qualifying zero-emission technology.

Simplifying the Ontario Computer Animation and Special Effects Tax Credit

The Ontario Computer Animation and Special Effects (OCASE) Tax Credit is an 18 percent refundable corporate income tax credit. It is available to companies that undertake computer animation and special effects activities on eligible film and television productions in Ontario. Currently, to be eligible for the OCASE Tax Credit, a production must also be certified for either the Ontario Film and Television Tax Credit or the Ontario Production Services Tax Credit — tethering the OCASE Tax Credit to these other film and television tax credits.

The budget proposes to remove this tethering requirement and replace it with simplified eligibility rules, including a $25,000 minimum labour expenditure per production. The new rules will come into effect for productions on which qualifying work begins on or after March 26, 2024.

Ontario Film and Television Tax Credit regional bonus

The Ontario Film and Television Tax Credit regional bonus is generally available to productions that are shot or animated predominantly in Ontario, outside the Greater Toronto Area. The government announced its intention to review this regional bonus to ensure it effectively supports film and television production across the province.

Personal income tax measures

Personal income tax rates

No new personal income tax rate changes were announced in this year’s budget. The top marginal personal income tax rate for Ontario is 13.16 percent for 2024. The current top combined federal and Ontario marginal rates (including the provincial surtax) for 2024 are summarized below:

Other tax measures

Extending the temporary gas tax and fuel tax rate cuts

On July 1, 2022, the government temporarily reduced the gasoline tax rate by 5.7 cents per litre and the fuel tax rate by 5.3 cents per litre until June 30, 2024. The government is proposing to extend these rate cuts so that the gasoline and fuel tax rates remain at nine cents per litre for an additional six months until December 31, 2024.

Ontario Non-Resident Speculation Tax

First introduced in 2017, Ontario’s Non‐Resident Speculation Tax (NRST) is a tax applied where residential property is purchased by a foreign person or entity. In 2022, the government expanded the tax provincewide and increased the rate from 15 percent to 25 percent.

Moving forward, the government announced it is taking further action to strengthen the NRST with amendments to support compliance and improve fairness. In addition, the government will take steps to increase information sharing between provincial, federal, and municipal governments to support greater understanding of home vacancy, foreign purchasing, and ownership patterns.

Enabling municipalities to lower taxes on new purpose-built rentals

To further encourage the development of purpose‐built rental properties, the government is providing municipalities with the flexibility to offer a reduced municipal property tax rate on new multi‐residential rental properties. This measure will take immediate effect and is intended to help address the current housing crisis and increase housing affordability. 

Property assessment and taxation review

The government is undertaking a review of the property assessment and taxation system. Consultations on the scope and priority areas of the review have commenced and will continue with broader stakeholder engagement across Ontario, starting in early spring. The provincewide property reassessment will continue to be deferred until this review is complete.

Elimination of wine basic tax

The budget announced proposals to eliminate the 6.1 percent wine basic tax which is currently applied to sales of Ontario wine and wine coolers in on-site winery retail stores. The new rate will come into effect on April 1, 2024.

To promote a more competitive marketplace for Ontario-based producers and consumers, the government will conduct a targeted review of taxes and fees on beer, wine, and alcoholic beverages.

Modernizing and enhancing tobacco tax oversight

Since committing to modernize the Tobacco Tax Act (the Act) in its 2023 budget, the government is proposing additional changes to strengthen oversight and reduce burden on registrants. These changes include:

• Moving the monthly filing deadline for tobacco tax registrants from the tenth to twenty-eighth of each month to allow registrants more time to file and better align with other tax filings deadlines. The proposed change would come into effect in July 2024.
• Strengthening fines in the Act.
• Providing new tools and continued support to the Ontario Ministry of Finance and Ontario Provincial Police Contraband Tobacco Enforcement Team.
• Creating a new partnership agreement between the Ontario Ministry of Finance and the Ministry of Health (commencing in 2024) to help inspectors take a coordinated approach to help address unregulated tobacco.
• Improving the overall online experience for registrants for an easier and more efficient filing process.
• Continuing to engage with stakeholders and First Nations partners to identify opportunities to modernize the Act, strengthen oversight, and align the legislation to the changing marketplace.

Full details of the 2024 Ontario budget can be found here.