2024 Ontario Budget Highlights
On March 26, 2024, Peter Bethlenfalvy, Minister of Finance tabled the 2024-25 Ontario budget. We have highlighted selected tax proposals from the budget that affect individuals and small businesses in Ontario.
INDIVIDUALS
Personal Tax Rates
The budget did not contain any changes to Ontario personal income tax rates or the surtax rates. The Ontario surtax is a tax calculated on the base amount of Ontario tax. Ontario indexed the 2024 provincial tax brackets 4.5 per cent inflation.
| 2023 Taxable Income | 2024 Taxable Income | Tax Rate |
|---|---|---|
| $0 to $49,231 | $0 to $51,446 | 5.05%& |
| $49,231 to $98,463 | $51,446 to $102,894 | 9.15% |
| $98,463 to $150,000 | $102,894 to $150,000 | 11.16% |
| $150,000 to $220,000 | $150,000 to $220,000 |
12.16% |
| Over $220,000 |
Over $220,000 | 13.16% |
Ontario Surtaxes
| 2023 Ontario Tax | 2023 Surtax Rate on Tax | 2024 Ontario Tax | 2024 Surtax Rate on Tax |
|---|---|---|---|
| $0 to $5,315 | No surtax | $0 to $5,554 | No surtax |
| $5,315 to $6,802 | 20% in excess of $5,315 | $5,554 to $7,108 | 20% in excess of $5,554 |
| Over $6,802 | 36% in excess of $6,802 + 20% of tax in excess of $5,315 |
Over $7,108 | 36% in excess of $7,108 + 20% of tax in excess of $5,554 |
Top Combined Ontario and Federal Rates
| Income Type | 2023 | 2024 |
|---|---|---|
| Salary, interest, pension, foreign | 53.53% | 53.53% |
| Eligible dividends | 39.34% | 39.34% |
| Non-eligible dividends | 47.74% | 47.74% |
| Capital gains | 26.77% | 26.77% |
Top rates apply to taxable income over $246,752 ($235,676 for 2023) based on known federal and provincial rates as of March 26, 2024.
Personal Income Tax Measures
- Ontario will extend authority to all single- and upper-tier municipalities to impose a tax on vacant homes. A new policy framework will also set out best practices for implementing a Vacant Home Tax (VHT) and encourage municipalities to set a higher Vacant Home Tax rate for foreign-owned vacant homes.
- Extending of the temporary cuts to the gasoline tax rate by 5.7 cents per litre and the fuel (diesel) tax rate by 5.3 cents per litre so that the rate of tax on gas and fuel would remain at 9 cents per litre until December 31, 2024.
- The government is proposing to eliminate the wine basic tax that applies to sales of Ontario wine and wine coolers in on-site winery retail stores. The new rate would come into effect on April 1, 2024. Additionally, the government will freeze the beer basic tax indexation and the LCBO mark‐up rates for another two years.
Other Measures
- Extending the tuition freeze at Ontario’s publicly assisted colleges and universities for at least three more years.
- Helping more seniors access financial assistance by indexing the Guaranteed Annual Income System (GAINS) benefit to the rate of inflation and expanding the annual income eligibility threshold.
- Banning new road tolls on 400‐series highways in Ontario and freezing driver’s licence and photo card fees. The government has also eliminated licence plate renewal fees and plate stickers on a go‐forward basis.
- The government is keeping electricity costs down by expanding the eligibility for the Ontario Electricity Support Program (OESP) beginning March 1, 2024.
BUSINESSES
The budget did not propose any changes to Ontario corporate tax rates or the $500,000 small business income (SBD) threshold.
Ontario Corporate Tax Rates
| Income Type | Provincial | Federal | Combined Calendar 2024 |
|---|---|---|---|
| General corporate income | 11.50% | 15.00% | 26.50% |
| Small business income | 3.20% | 9.00% | 12.20% |
| Small business income over the federal limit and under the Ontario limit | 3.20 | 15.00% | 18.20% |
| CCPC* investment income | 11.50% | 38.67% | 50.17% |
| Non-CCPC investment income | 11.50% | 15.00% | 26.50% |
| Manufacturing & processing income | 10.00% | 15.00% | 25.00% |
* Canadian-controlled private corporation
Based on known federal and provincial rates as of March 26, 2024.
Business Income Tax Measures
- Ontario will allow municipalities to reduce municipal property tax rates on the development of new rental properties, effective immediately. The government is also reviewing the property assessment and taxation system to focus on fairness, affordability, business competitiveness and modernized administration tools.
- Simplifying the Ontario Computer Animation and Special Effects (OCASE) Tax Credit which is an 18 per cent refundable corporate income tax credit by removing the “tethering” eligibility requirement. The government will introduce new eligibility rules for qualifying corporation on work commencing on or after March 26, 2024.
Refer to the 2024 Ontario Budget for further details
This has been prepared by the Total Wealth Solutions Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member - Canadian Investor Protection Fund.