2020 ONTARIO BUDGET EXECUTIVE SUMMARY
The 2020 Ontario Budget was released on November 5, 2020. We have chosen not to summarize all tax measures proposed in this year’s Budget and instead highlighted what we believe to be most important to you.
- No changes to personal tax rates.
- No changes to corporate tax rates.
EMPLOYER HEALTH TAX
- In March 2020, Ontario announced that the Employer Health Tax (“EHT”) exemption available to private-sector employers with total annual Ontario remuneration of $5 million or less would be increased from $490,000 to $1 million for 2020. The Budget proposes to make this exemption increase permanent and double the threshold payroll amount beyond which EHT instalments are required to $1.2 million starting in 2021.
ONTARIO CULTURAL MEDIA TAX CREDITS
- The Budget proposes to temporarily extend certain timelines and amend some requirements for four Ontario cultural media tax credits in order to assist companies operating in the cultural industries meet certain tax credit deadlines and maintain eligibility for tax credits as follows:
Ontario Film and Television Tax Credit
For productions for which eligible expenditures were incurred prior to March 15, 2020, and that were not completed, certified or deemed ineligible for the tax credit by Ontario Creates before March 15, 2020, the 24-month deadline to file an application of a certificate of completion would be extended by an additional 24 months. Companies will continue to have the option to extend this 48-month deadline by an additional 18 months. The 24-month claim period for eligible expenditures and two-year requirement for productions to have an agreement in writing would also be extended by an additional 24 months.
Ontario Production Services Tax Credit
For productions for which eligible expenditures (or otherwise eligible expenditures) were incurred in Ontario in taxation years ending in 2020 and 2021, the 24-month period to meet the minimum spending requirements would be extended by an additional 24 months. In addition, certain companies would be allowed to claim otherwise eligible expenditures incurred in the two taxation years prior to the year in which principal photography begins.
Ontario Interactive Digital Media Tax Credit
For products not completed before March 15, 2020, and for which eligible labour expenditures were incurred in the 2020 taxation year, the 37-month labour expenditure period would be extended by an additional 24 months.
Ontario Book Publishing Tax Credit
For the 2020 and 2021 taxation years, the requirement that literary works must be published in a bound edition of at least 500 copies would be waived.
ONTARIO RESEARCH AND DEVELOPMENT TAX CREDIT
- Ontario proposes to extend the reporting deadlines to claim an Ontario Research and Development Tax Credit (“ORDTC”) to parallel the extension of the reporting deadlines for federal scientific research and experimental development claims. Corporations with taxation year-ends from September 13, 2018, to December 31, 2018, will have an additional 6 months to file an ORDTC claim while those corporations with taxation year-ends from January 1, 2019, to June 29, 2019, will have until December 31, 2020, to file an ORDTC claim.