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Transparency in Taxation

Tax expenditure reporting is an important element of fiscal accountability. It increases fiscal transparency by providing a comprehensive picture of forgone revenue in the tax system. As required under the Fiscal Transparency and Accountability Act, 2004, the Minister of Finance has released information about the estimated cost of expenditures made through the tax system each year, beginning in 2005, as part of the mid-year review of the fiscal plan.

Structure of the Report

This report provides the most current estimates of tax expenditures under the following:

  • Personal Income Tax;
  • Corporate Income Tax;
  • Sales and Commodity Tax;
  • Education Property Tax;
  • Employer Health Tax;
  • Mining Tax;
  • Estate Administration Tax; and
  • Gross Revenue Charge.

Descriptions of the tax provisions listed in this report are available at:
budget.ontario.ca/2016/fallstatement/provisions.html

Scope

Given the absence of a universally accepted definition of a “tax expenditure,” this report continues the approach adopted in previous reports of listing estimates of forgone revenue that could potentially be included under a broad-based tax system. 

This report includes:

  • provincial tax reductions and exemptions administered by the Province or Ontario’s municipalities;
  • tax expenditures that are shared with the federal government under income tax and sales tax collection agreements; and
  • Ontario-only tax expenditures administered by the federal government under those agreements.

Under the tax collection agreements, the federal government determines the tax bases for the Personal Income Tax, Corporate Income Tax and Harmonized Sales Tax.  As a result, Ontario parallels federal tax expenditures associated with these tax bases. The agreements allow Ontario to implement certain measures that the federal government administers for the Province.

Not included in this report are measures that were repealed or phased out in the calendar year or are reported as expenses in the Public Accounts of Ontario. Tax expenditures that are not related to relief of taxes paid are reported as expenses in Volume 1 of the Public Accounts of Ontario. Examples of these include the Northern Ontario Energy Credit and the Ontario Political Contribution Tax Credit for individuals and the Ontario Innovation Tax Credit for corporations.

Method

The estimates in this report were developed using the latest available taxation and economic data, forecast to the 2016 calendar year. The data used to estimate the values of the tax provisions come from a variety of sources. The estimated value of a tax provision may differ from the amount reported in a prior year for a variety of reasons including amendments to the provision, changes in economic factors, revisions to the underlying data and improvements to the estimation method. Some tax provision estimates are particularly sensitive to economic conditions or other variables and, therefore, can fluctuate significantly from year to year.

Each estimate is presented on a full-year basis, which includes the full-year impact of tax provisions that took effect within the year. This approach enables a better comparison of the revenue forgone from measures that come into effect at different times in the year. Tax expenditure reports prior to 2010 presented estimates only for the portion of the year that a tax provision was in place. Hence, care must be taken when comparing this report to earlier reports.

It is important to note that the estimates in this report are not intended to represent the potential change in revenue if the tax provisions were not in place. Each estimate has been determined separately and in isolation from other factors, such as the interactions between various tax provisions. As a result, the estimates cannot be added together to determine the total cost of a particular group of tax expenditures.

Tax expenditure estimates below $10 million are rounded to the nearest $1 million and estimates above $10 million are rounded to the nearest $5 million. Tax expenditure estimates of less than $1 million are denoted by the letter “s” (small). This report also includes tax provisions for which relevant data are not currently available.

Personal Income Tax

Table 1 provides estimates of tax provisions relating to the Ontario Personal Income Tax system. Business provisions listed here are for unincorporated businesses.

Table 1a
Personal Income Tax1
Ontario Non-Refundable Tax Credits
Tax Provisions 2016 Estimates2
($ Millions)
Adoption Expense Credit s
Age Credit 315
Amounts Transferred from a Spouse or Common-Law Partner 35
Basic Personal Credit 4,505
Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) Contributions Credit 590
Caregiver Credit 35
Charitable Donations Credit 650
Community Food Program Donation Tax Credit for Farmers s
Disability Credit 170
Eligible Dependant Credit 85
Employment Insurance (EI) Premiums Credit 215
Infirm Dependant Credit 1
Medical Expense Credit 175
Pension Income Credit 130
Spouse or Common-Law Partner Credit 180
Student Loan Interest Credit 5
Tuition and Education Credits 365

Table 1a footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Table 1b
Personal Income Tax1
Ontario Tax Reduction (OTR)
Tax Provisions 2016 Estimates2
($ Millions)
OTR — Basic Reduction 240
OTR — Reduction for Dependent Children Under 19 205
OTR — Reduction for Disabled or Infirm Dependants 25
OTR — Total 400

Table 1b footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Table 1c
Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Business
Tax Provisions 2016 Estimates2
($ Millions)
Deduction for Canada Pension Plan (CPP)/Quebec Pension Plan (QPP) Contributions on Self-Employment and Other Earnings 50
Items for Which an Estimate is not Available:
  • Assistance for Artists and Deduction for Canadian Art Purchased by Unincorporated Businesses
  • Assistance for Prospectors and Grubstakers
  • Deduction of Accelerated Capital Cost Allowance
  • Deferral through Use of Billed-Basis Accounting by Professionals
 NA

Table 1c footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Table 1d
Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Employment
Tax Provisions 2016 Estimates2
($ Millions)
Deduction for Clergy Residence 15
Deduction of Home Relocation Loans s
Deduction for Military and Police Deployed to High-Risk International Missions 3
Deduction of Other Employment Expenses 230
Deduction of Union and Professional Dues 185
Deduction for Employee Stock Options 235
Moving Expense Deduction 15
Northern Residents Deductions 2
Items for Which an Estimate is not Available:
  • Deduction for Artists and Musicians
  • Deduction for Tradespersons’ and Apprentice Vehicle Mechanics’ Tools
  • Deduction for Tuition Assistance for Adult Basic Education
  • Deferral of Salary through Leave of Absence/Sabbatical Plans
  • Employee Benefit Plans
  • Non-Taxation of Business-Paid Health and Dental Benefits
  • Non-Taxation of Certain Non-Monetary Employment Benefits
  • Special Tax Computations for Certain Retroactive Lump-Sum Payments
 NA

Table 1d footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Table 1e
Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Farming and Fishing
Tax Provisions 2016 Estimates2
($ Millions)
Items for Which an Estimate is not Available:
  • Cash-Basis and Flexibility in Inventory Accounting
  • Deferral of Income for Farmers
  • Income Stabilization Account for Farmers
 NA

Table 1e footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Table 1f
Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Investment
Tax Provisions 2016 Estimates2
($ Millions)
Lifetime Capital Gains Exemption for Farm or Fishing Property and Small Business Shares 300
Deduction of Allowable Business Investment Losses 8
Deduction of Carrying Charges Incurred to Earn Income 380
Deduction of Resource-Related Expenditures 40
Partial Inclusion of Capital Gains 1,375
Tax-Free Savings Accounts (TFSAs) — Non-Taxation of Investment Income3 175
Items for Which an Estimate is not Available:
  • Capital Gains Exemptions — $1,000 on Personal-Use Property and $200 on Foreign Exchange Transactions
  • Deferral of Capital Gains through Five-Year Reserves
  • Deferral of Capital Gains through Rollovers
  • Deferral of Capital Gains through 10-Year Reserves for Farm or Fishing Property and Small Business Shares
  • Deferral of Capital Gains through Transfers to a Spouse, Spousal Trust or Family Trust
  • Exemption for Capital Gains Arising from Certain Donations
  • Non-Taxation of Capital Gains on Principal Residences
  • Taxation of Capital Gains Upon Realization
 NA

Table 1f footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

[3] Estimate represents the forgone revenue from non-taxation of investment income earned in the accounts.

Table 1g
Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Non-Taxable Income
Tax Provisions 2016 Estimates2
($ Millions)
Guaranteed Income Supplement and Allowance Benefits 45
Social Assistance Benefits and Provincial Supplements 40
Workers’ Compensation Benefits 120
Items for Which an Estimate is not Available:
  • Certain Service Pensions, Allowances, Compensation and Amounts, and Certain War Pensions
  • Damages with Respect to Personal Injury or Death
  • Death Benefits of Up to $10,000
  • Employer-Paid CPP/QPP Contributions and EI Premiums
  • Gifts and Bequests
  • Allowances for Diplomats and Other Government Employees Posted Abroad
  • Income of Status Indians and Indian Bands on Reserve
  • Investment Income on Life Insurance Policies
  • Lottery and Gambling Winnings
  • Partial Inclusion of U.S. Social Security Benefits
  • Strike Pay
 NA

Table 1g footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Table 1h
Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Special Circumstances
Tax Provisions 2016 Estimates2
($ Millions)
Child Care Expense Deduction 220
Pension Income Splitting 290
Treatment of Spousal and Child Support Payments 60
Items for Which an Estimate is not Available:
  • Deduction Related to Vows of Perpetual Poverty
  • Disability Supports Deduction
  • Exemption of Scholarship, Fellowship and Bursary Income
  • Tax-Free Amount for Emergency Service Volunteers
 NA

Table 1h footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Table 1i
Personal Income Tax1
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Tax-Deferred Savings
Tax Provisions 2016 Estimates2
($ Millions)
Registered Pension Plans (RPPs) — Deduction for Contributions 1,220
Registered Retirement Savings Plans (RRSPs) — Deduction for Contributions 2,350
Items for Which an Estimate is not Available:
  • Deferred Profit-Sharing Plans
  • Registered Disability Savings Plans (RDSPs) — Non-Taxation of Investment Income and Federal Contributions
  • Registered Education Savings Plans (RESPs) — Non-Taxation of Investment Income and Federal Contributions
  • RPPs — Non-Taxation of Investment Income
  • RRSPs and Registered Retirement Income Funds — Non-Taxation of Investment Income
 NA

Table 1i footnotes:

[1] Estimates do not include the impact of revenue forgone from Personal Income Tax provisions for trusts, which are taxed as individuals under the Taxation Act, 2007.

[2] Estimates are based on 2013 tax filer data forecast to represent the 2016 taxation year.

Personal Income Tax — Description of Changes to Tax Provisions

The following Personal Income Tax provisions have changed or been introduced since the Transparency in Taxation, 2015 report.

Federal Changes

Changes introduced by the federal government to the Personal Income Tax base are reflected in Ontario’s tax expenditure estimates. The federal government phased out the Overseas Employment Tax Credit for 2016, and that item no longer appears in this report.

Indexation

Many Ontario non-refundable tax credits and the Ontario Tax Reduction are based on amounts that are adjusted for inflation each year.

Corporate Income Tax

Estimates of tax provisions relating to the Ontario Corporate Income Tax system are presented in Table 2.

Table 2a
Corporate Income Tax
Ontario Deductions, Non-Refundable Tax Credits and Exemptions
Tax Provisions 2016 Estimates1
($ Millions)
Community Food Program Donation Tax Credit for Farmers s
Ontario Credit Union Tax Reduction  6
Ontario Political Contributions Tax Credit s
Ontario Research and Development (R&D) Tax Credit2 170
Ontario Resource Tax Credit s
Ontario Small Business Deduction3 1,775
Ontario Tax Credit for Manufacturing and Processing 230

Table 2a footnotes:

[1] Estimates are forecast to the 2016 calendar year based on preliminary tax administration data for 2015 and prior years. Estimates do not include the revenue forgone from Corporate Income Tax provisions for mutual fund corporations.

[2] Estimate is net of any recapture of the Ontario R&D Tax Credit.

[3] The cost of the Ontario Small Business Deduction is partially offset by the lower Dividend Tax Credit rate that is applied to non-eligible dividends.  This offset is not included in the Ontario Small Business Deduction estimate.

Table 2b
Corporate Income Tax
Exemptions, Deductions, Deferrals and Other Measures Shared with the Federal Government
Tax Provisions 2016 Estimates1
($ Millions)
Allowable Business Investment Losses 3
Deductibility of Charitable Donations 110
Deductibility of Gifts of Cultural Property and Ecologically Sensitive Land 7
Deductibility of Gifts to the Crown s
Holdback on Progress Payments to Contractors 25
Non-Taxation of Non-Profit Organizations 215
Partial Inclusion of Capital Gains 1,540
Items for Which an Estimate is not Available:
  • Accelerated Write-Off of Capital Assets and Resource-Related Expenditures
  • Cash-basis and Flexibility in Inventory Accounting
  • Deductibility of Countervailing and Anti-Dumping Duties
  • Deferral of Income for Farmers
  • Deferral Through Capital Gains Rollovers
  • Deferral Through Use of Billed-Basis Accounting by Professionals
  • Donations of Medicine for the Developing World
  • Exemption for Capital Gains Arising from Certain Donations
  • Expensing of Advertising Costs
  • Non-Taxation of Provincial, Municipal and Federal Crown Corporations
  • Non-Taxation of Registered Charities
  • Taxation of Capital Gains upon Realization
  • Tax Exemption on Income of Foreign Affiliates of Canadian Corporations
 NA

Table 2b footnotes:

[1] Estimates are forecast to the 2016 calendar year based on preliminary tax administration data for 2015 and prior years. Estimates do not include the revenue forgone from Corporate Income Tax provisions for mutual fund corporations.

Corporate Income Tax — Description of Changes to Tax Provisions

The following Corporate Income Tax provisions have changed since the Transparency in Taxation, 2015 report.

Ontario Deductions, Non-refundable Tax Credits and Exemptions

Ontario Research and Development (R&D) Tax Credit — A non-refundable tax credit is available to corporations on eligible Scientific Research and Experimental Development (SR&ED) expenditures in Ontario.  For taxation years that commence after May 31, 2016, the tax credit rate is 3.5 per cent.  The tax credit rate is prorated for taxation years straddling June 1, 2016.  For taxation years that end before June 1, 2016, the tax credit rate is 4.5 per cent.

Sales and Commodity Tax

Sales Tax

Estimates of tax provisions relating to sales taxes, including the Harmonized Sales Tax and Retail Sales Tax, are presented in Tables 3 and 4.

Table 3a
Harmonized Sales Tax
Ontario-Specific Items
Ontario Point-of-Sale Rebates
Tax Provisions 2016 Estimates1
($ Millions)
Books 120
Children’s Car Seats/Car Booster Seats 4
Children’s Clothing 115
Children’s Diapers 30
Children’s Footwear 35
Prepared Foods and Beverages ($4 or less) 175
Print Newspapers 55
Qualifying Purchases by First Nations 35

Table 3a footnotes:

[1] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3b
Harmonized Sales Tax
Ontario-Specific Items
Ontario Public Service Body Rebates
Tax Provisions 2016 Estimates1
($ Millions)
Hospitals 455
Municipalities 1,215
Public Colleges 60
Qualifying Non-Profit Organizations 60
Registered Charities  365
School Authorities 375
Universities 180

Table 3b footnotes:

[1] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3c
Harmonized Sales Tax
Ontario-Specific Items
Other Ontario Measures
Tax Provisions 2016 Estimates1
($ Millions)
Ontario Energy and Property Tax Credit — Energy Component2 430
Ontario New Housing Rebate (including new residential rental property) 1,265
Ontario Sales Tax Credit3 1,260

Table 3c footnotes:

[1] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

[2], [3] Estimate is based on entitlements data for 2015 forecast to 2016.

Table 3d
Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Business
Tax Provisions 2016 Estimates2
($ Millions)
Exemption for Ferry, Road and Bridge Tolls 15
Exemption and Rebate for Legal Aid Services 20
Rebate for Foreign Conventions and Tour Packages 9
Rebate for Poppies and Wreaths s
Small Suppliers’ Threshold 180
Items for Which an Estimate is not Available:
  • Exemption for Domestic Financial Services
  • Non-Taxability of Certain Importations
  • Zero-Rating of Agricultural and Fish Products and Purchases
 NA

Table 3d footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.

[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3e
Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Charities and Non-Profit Organizations
Tax Provisions 2016 Estimates2
($ Millions)
Exemption for Certain Supplies Made by Charities and Non-Profit Organizations 860

Table 3e footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.

[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3f
Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Education
Tax Provisions 2016 Estimates2
($ Millions)
Exemption for Education Services (Tuition) 530

Table 3f footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax

[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3g
Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Health Care
Tax Provisions 2016 Estimates2
($ Millions)
Exemption for Health Care Services 555
Exemption for Hospital Parking 30
Zero-Rating of Medical Devices 230
Zero-Rating of Prescription Drugs 555

Table 3g footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax

[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3h
Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Households
Tax Provisions 2016 Estimates2
($ Millions)
Exemption for Child Care  115
Zero-Rating of Basic Groceries 2,560
Zero-Rating of Feminine Hygiene Products 20
Items for Which an Estimate is not Available:
  • Exemption for Personal Care Services
 NA

Table 3h footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax

[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3i
Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Housing
Tax Provisions 2016 Estimates2
($ Millions)
Exemption for Residential Rent (Long-Term) 1,170
Items for Which an Estimate is not Available:
  •   Exemption for Sales of Used Residential Housing and Other Personal-Use Real Property
 NA

Table 3i footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.

[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 3j
Harmonized Sales Tax
Exemptions, Zero-Rating and Other Measures Shared with the Federal Government1
Municipalities
Tax Provisions 2016 Estimates2
($ Millions)
Exemption for Municipal Transit 165
Exemption for Water and Basic Garbage Collection Services 185

Table 3j footnotes:

[1] Estimates represent the forgone revenue associated with the provincial component of the Harmonized Sales Tax.

[2] Estimates are based on preliminary administrative data or data from Statistics Canada, unless otherwise noted.

Table 4
Retail Sales Tax
Tax Provisions 2016 Estimates
($ Millions)
Exemption for Automobile Insurance Premiums1 1,055
Exemption for Individual Life and Health Insurance Premiums2 660
Vendor Compensation3 3

Table 4 footnotes:

[1] Based on industry data.

[2] Based on insurance premiums data published by the Canadian Life and Health Insurance Association Inc.

[3] Based on returns filed by registered tax collectors.

Commodity Tax

Estimates of tax provisions relating to commodity taxes, including the Fuel Tax, Gasoline Tax, Land Transfer Tax, Tobacco Tax, and Beer and Wine Tax, are presented in Table 5.

Table 5a
Commodity Tax
Fuel Tax
Tax Provisions 2016 Estimates
($ Millions)
Exemptions/Reduced Rates - Exemption for Coloured Fuel1 270
Exemptions/Reduced Rates - Reduced Rate for Railway Diesel2 65
Refunds - Auxiliary Power Take-Off Equipment3 4

Table 5a footnotes:

[1] Based on tax administrative data.

[2] Forgone revenue estimated as difference from the general fuel tax rate.

[3] Based on refunds filed or deferrals claimed.

Table 5b
Commodity Tax
Gasoline Tax
Tax Provisions 2016 Estimates
($ Millions)
Exemptions/Reduced Rates - Exemption for Methanol and Natural Gas1 15
Exemptions/Reduced Rates - Reduced Rate for Aviation Fuel2 285
Exemptions/Reduced Rates - Reduced Rate for Propane3 7
Refunds - Auxiliary Power Take-Off Equipment4 s
Refunds - Aviation Fuel5 s
Refunds - Tax-Exempt Use in Unlicensed Equipment6 3

Table 5b footnotes:

[1] Forecast for the 2016 calendar year is based on 2011 provincial Input–Output tables from Statistics Canada.

[2], [3] Forgone revenue estimated as difference from the general gasoline tax rate.

[4], [5], [6] Based on refunds filed or deferrals claimed.

Table 5c
Commodity Tax
Land Transfer Tax
Tax Provisions 2016 Estimates
($ Millions)
Exemptions - Deferrals and Exemptions for Corporate Reorganizations1 40
Exemptions - Family Business Conveyances2 s
Exemptions - Family Farms3 15
Exemptions - Life Leases4 1
Exemptions - Items for Which an Estimate is not Available:
  • Hospital Restructuring
  • Oil/Pipeline Easements and Mineral Lands
  • Other Transfers and Dispositions
  • Reorganization of Charities
NA
Refunds - First-Time Home Buyers Refund5 180

Table 5c footnotes:

[1], [2], [5] Based on refunds filed or deferrals claimed.

[3], [4] Based on tax administrative data.

Table 5d
Commodity Tax
Tobacco Tax
Tax Provisions 2016 Estimates
($ Millions)
Compensation for Tax Collectors1 s

Table 5d footnotes:

[1] Based on tax administrative data.

Table 5e
Commodity Tax
Beer and Wine Tax1
Tax Provisions 2016 Estimates
($ Millions)
Exemptions/Reduced Rates - Exemption for Promotional Distribution2 1
Exemptions/Reduced Rates - Reduced Rate for Beer Made by Ontario Microbrewers3 10
Exemptions/Reduced Rates - Reduced Rate for Beer Made and Sold at Ontario Brew Pubs4 s
Exemptions/Reduced Rates - Reduced Rate for Ontario Wine and Ontario Wine Coolers5 20
Exemptions/Reduced Rates - Reduced Rate for Wine Coolers6 s

Table 5e footnotes:

[1] Beer and wine taxes apply on sales of domestic beer in the Beer Store, on-site manufacturers’ stores and licensed establishments, and on wine sales in winery retail stores. Does not include sales in LCBO stores or licensed establishments where the purchase is from the LCBO.

[2] Based on estimated manufacturers’ promotional distribution.

[3] Forgone revenue estimated as difference from the basic tax on beer made by a beer manufacturer.

[4] Forgone revenue estimated as difference from the basic tax and volume tax on beer made by a beer manufacturer.

[5] Forgone revenue estimated as difference from the basic tax on wine or wine coolers that is not Ontario wine or Ontario wine coolers.

[6] Forgone revenue estimated as difference from the volume tax on wine.

Commodity Tax — Description of Changes to Tax Provisions

The following commodity tax provisions have changed since the Transparency in Taxation, 2015 report.

Reduced Rate for Aviation Fuel – On April 1, 2016, the tax rate on aviation fuel increased from 4.7 cents per litre to 5.7 cents per litre. The 2014 Ontario Budget announced an increase to the tax rate on aviation fuel by one cent per litre each year for four years. The first tax rate increase came into effect on September 1, 2014. The second and third tax rate increases came into effect on April 1 of 2015 and 2016 of each respective year. The tax rate will increase by a further one cent per litre on April 1, 2017. Upon full implementation, on April 1, 2017, aviation fuel will be taxed at the rate of 6.7 cents per litre.

Education Property Tax

Table 6 provides estimates of tax provisions relating to the Education Property Tax system.

Table 6
Education Property Tax1
Tax Provisions 2016 Estimates2
($ Millions)
Brownfields Financial Tax Incentive Program3 s
Charity Rebate 10
Conservation Land Property Tax Exemption Program 4
Eligible Convention Centres Exemption s
Eligible Live Performance Theatres Exemption and Professional Sports Facility Tax Rate Reduction 15
Farm Property Class Tax Rate Reduction 80
Farmlands Awaiting Development Sub-Class Tax Rate Reduction s
Heritage Property Tax Rebate 2
Managed Forest Tax Incentive Program  5
Ontario Energy and Property Tax Credit — Property Tax Component4 830
Ontario Senior Homeowners’ Property Tax Grant5 200
Seniors and Persons with Disabilities Property Tax Relief6 s
Tax Exemptions Under Private Statutes 5
Vacant Commercial and Industrial Unit Rebate 45
Vacant Land and Excess Land Sub-Class Tax Rate Reduction 50
Items for Which an Estimate is not Available:
  • Other Tax Exemptions Under Public Statutes
  • Discretionary exemptions granted by municipalities to special purpose properties (e.g., legions, navy leagues, public–private capital facilities)
  • Mandatory exemptions granted to special purpose/institutional properties (e.g., places of worship, cemeteries, Boy Scouts Association of Canada and Canadian Girl Guides Association, charitable institutions including Canadian Red Cross, St. John Ambulance and charitable, non-profit philanthropic corporations organized for the relief of the poor)
  • Relief from Property Taxes that are unduly burdensome for Residential, Farm or Managed Forest Properties
 NA

Table 6 footnotes:

[1] Expenditures related to provincial land taxes or payments made in lieu of taxes have not been included.

[2] Estimates based on 2016 education tax rates, 2016 Assessment Roll, 2014 Municipal Financial Information Returns and municipal tax policies, unless otherwise noted.

[3] Effective October 1, 2004, municipalities may pass bylaws cancelling municipal property taxes on eligible brownfields properties. The Province may match the municipal reduction with an education property tax reduction.

[4] Estimate is based on entitlements data for 2015 forecast to 2016.

[5] Estimate is based on entitlements data for 2016.

[6] Estimate does not include expenditures due to the exemption from taxation on 10 per cent of the assessment of improvements to accommodate seniors and   persons with disabilities in newly built homes or the expenditure on such improvements in existing homes.

Education Property Tax — Description of Changes to Tax Provisions

The following Education Property Tax provision has changed since the Transparency in Taxation, 2015 report.

The Ontario Energy and Property Tax Credit—Property Tax Component is based on amounts that are adjusted for inflation each year.

Employer Health Tax

Table 7 provides an estimate of the tax exemption for private-sector employers under the Employer Health Tax.

Table 7
Employer Health Tax
Tax Provisions 2016 Estimates
($ Millions)
$450,000 Exemption for Private-Sector Employers 850

Mining Tax

Estimates of tax provisions relating to the Ontario Mining Tax system are presented in Table 8.

Table 8
Mining Tax
Tax Provisions 2016 Estimates1
($ Millions)
Annual $500,000 Deduction s
Tax Holiday for New Mines (other than remote mines) 2
Tax Holiday for New Remote Mines s
Reduced Tax Rate for Remote Mines 6
Processing Allowance 40
Item for Which an Estimate is not Available:
  • Fast Write-Off of Exploration Costs
 NA

Table 8 footnotes:

[1] Estimates are forecast to the 2016 calendar year based on 2015 Ontario Mining Tax administration data.

Estate Administration Tax

Table 9 provides an estimate of the tax exemption for small estates under the Estate Administration Tax.

Table 9
Estate Administration Tax
Tax Provisions 2016 Estimates
($ Millions)
Exemption Where the Value of the Estate Does Not Exceed $1,000 s

Gross Revenue Charge

Table 10 provides an estimate of the tax holiday under the Gross Revenue Charge.

Table 10
Gross Revenue Charge (GRC)
Tax Provisions 2016 Estimates
($ Millions)
Item for Which an Estimate is not Available:
  • Gross Revenue Charge 10-Year Holiday
 NA
Updated: November 14, 2016
Published: November 14, 2016