News and Insights

Ontario Budget 2011

Tax Development Mar 30, 2011

On March 29, 2011, the Honourable Dwight Duncan, Minister of Finance, presented the 2011 Ontario Budget – “Turning the Corner to a Better Tomorrow”.  The focus of this budget is to build on the progress made by the Ontario government in the areas of economic growth, job creation, education and the health care system, while addressing some of Ontario’s fiscal challenges, including deficit reduction.  

The 2011 budget outlines the government’s plan to eliminate the deficit through prudent fiscal management.  It presents a revised three-year deficit projection of $16.7 billion in 2010-11, $16.3 billion in 2011-12 and $15.2 billion in 2012-13.  This is an improvement of $4.7 billion over the amounts projected in the 2010 budget.

Commodity Tax Measures  

The budget indicated that no foreseeable reduction to the Harmonized Sales Tax (HST) will be made, as a reduction would require cuts to education and health care, hurting Ontario families and the economy.  Instead, a number of measures were introduced to ensure that outstanding taxes are collected on a timely basis, generating needed revenue through Ontario’s existing tax system to support public services.  These initiatives include two new opportunities in the areas of collections and audits and special investigations.   

In addition, several administrative and technical amendments are proposed to various tax and non-tax statutes, including the following:   

A proposed amendment to the Retail Sales Tax Act to allow the Minister to withhold the issuance of a clearance certificate until outstanding debts under any of the following acts have been paid or secured: the Alcohol and Gaming Regulation and Public Protections Act, 1996; Fuel Tax Act; Gasoline Tax Act; Race Tracks Act; and Tobacco Tax Act.  These amendments would generally apply to bulk sales completed on or after July 1, 2011, and would be in effect until June 30, 2013, pending a review.  However, this would not apply to bulk sales under written agreements entered into on or before March 29, 2011, even if the bulk sale is completed on or after July 1, 2011.    

A proposed amendment to the Alcohol and Gaming Regulation and Public Protection Act, 1996, Part II, “Beer and Wine Taxes”, to introduce an annual exemption of up to 10,000 litres of wine, wine coolers or beer distributed without charge, which will complement the marketing initiatives of the Ontario Wine Strategy and the Ontario Craft Brewers Strategy.  The exemption would be retroactive to July 1, 2010.   

Income Tax Measures  

No changes were announced to the general or small business corporate income tax rates in the 2011 Ontario Budget, and no new income tax measures were announced.  

Further details on the 2011 Ontario Budget are available from the Ontario Ministry of Finance web site at:
2011 Ontario Budget.