Tax Highlights: 2022 Ontario Budget
On April 28, 2022, Ontario’s Minister of Finance, Peter Bethlenfalvy, presented the province’s budget.
The budget does not change corporate or personal income tax rates, but does:
- extend the temporary increase to the regional opportunities investment tax credit rate
- introduce the Ontario seniors care at home tax credit, beginning the 2022 taxation year
An Ontario general election will be held on (or before) June 2, 2022. It is uncertain whether tax initiatives proposed in the Ontario budget will be enacted into law before the Legislative Assembly of Ontario is dissolved for the province’s upcoming general election.
Business tax measures
Corporate income tax rates
Ontario’s corporate income tax rates will remain as shown in the table below. The table also shows combined federal/Ontario corporate tax rates.
| Federal and Corporate Rates | Ontario | Ontario & Federal | |
|---|---|---|---|
| 2021/2022 | 2021/2022 | ||
| General Income | 11.5% | 26.5% | |
| M&P Income | 10% | 25% | |
| Canadian-controlled private corporations (CCPCs) | active business income to $500,000 | 3.2% | 12.2% |
| Canadian-controlled private corporations (CCPCs) | investment income | 11.5% | 50.7% |
Regional opportunities investment tax credit (ROITC)
The budget proposes to extend the temporary increase in the ROITC rate (from 10% to 20%) to qualifying investments that become available for use after March 23, 2021 and before January 1, 2024 (currently available before January 1, 2023). The ROITC is a refundable corporate income tax credit that is available for CCPCs that make qualifying investments in eligible geographic areas of Ontario. The maximum credit is $90,000 per taxation year during this temporary enhancement period.
Personal tax measures
Personal income tax rates
The budget does not change Ontario’s personal income tax rates. Top combined federal/Ontario personal income tax rates are shown below. These rates apply to individuals with taxable income above $221,708 in 2022 ($220,000 in 2021).
| Top combined federal/ Ontario rates | 2021/2022 | |
|---|---|---|
| Ordinary income & interest | 53.53% | |
| Capital gains | 26.76% | |
| Canadian dividends | eligible | 39.34% |
| Canadian dividends | non-eligible | 47.74% |
Ontario seniors care at home tax credit
The budget proposes to introduce the Ontario seniors care at home tax credit (SCHTC), starting with the 2022 tax year. A refundable tax credit, the SCHTC would provide up to 25% of an eligible senior’s claimable medical expenses up to $6,000 (maximum credit of $1,500). The credit would be reduced by 5% of family net income over $35,000, and the maximum credit would be fully phased out when family net income reaches $65,000.
Taxpayers would be eligible to claim this credit if they, or their spouse or common-law partner, turned 70 years of age or older in the year. Medical expenses eligible for the SCHTC would be the same as those claimed for the Ontario medical expense tax credit and taxpayers could claim both the SCHTC and the non-refundable federal and Ontario medical expense tax credits for the same eligible expenses.
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.
