Annex: Details of Tax Measures and Other Legislative Initiatives

Overview

This Annex contains detailed information on certain tax measures and other legislative initiatives proposed or implemented in this document.

Providing Harmonized Sales Tax Relief for First-Time Home Buyers on New Homes

On May 27, 2025, the federal government proposed eliminating the full federal portion of the Harmonized Sales Tax (HST) on qualifying newly built or substantially renovated homes valued up to $1 million for first-time home buyers. Ontario is taking steps to mirror this proposed federal Goods and Services Tax/Harmonized Sales Tax (GST/HST) First-Time Home Buyers Rebate, and, subject to passage of federal legislation that would bring the rebate into force, Ontario will work with the federal government to implement a new Ontario rebate. 

The new Ontario rebate would be available in addition to the existing Ontario HST New Housing Rebate, which already provides relief of up to $24,000 to eligible purchasers, including but not limited to first-time home buyers.

The new Ontario rebate, together with Ontario’s existing HST New Housing Rebate, would provide relief of the full 8 per cent provincial portion of the HST on qualifying new homes valued up to $1 million for first-time home buyers. The new Ontario rebate would follow the linear reduction under the proposed federal rebate for new homes valued between $1 million and $1.5 million. However, for new homes over $1 million, the combined amount of relief available under both Ontario rebates would not be less than what Ontario currently provides under the existing rebate. For example, an eligible purchaser of a new home valued at $1.35 million or above would still qualify for $24,000 in total provincial relief.  

The province will work with the federal government to propose that the new Ontario rebate be available if the agreement of purchase and sale for the home is entered into with the builder on or after May 27, 2025, and before 2031. Construction of the home must begin before 2031, and the home must be substantially completed before 2036.

Eligibility criteria for the new Ontario rebate would follow those set by the federal government, including that the individual must be acquiring the new home for use as their primary place of residence.

Details of Ontario’s proposed new rebate are based on the federal government’s proposal as announced on May 27, 2025. Implementation of the new Ontario rebate is subject to passage of federal legislation and requires federal regulatory changes. Ontario will continue to monitor the status of the federal proposal as it progresses through the federal legislative process.

Implementing 2025 Budget Tax Measures

The government introduced several tax measures as part of the 2025 Budget to provide targeted support for businesses. The government is now proposing amendments to the Taxation Act, 2007 to implement these measures. The proposals will be included in the bill accompanying this 2025 Ontario Economic Outlook and Fiscal Review.

Key measures include the following proposals:

• A temporary enhancement of the Ontario Made Manufacturing Investment Tax Credit (OMMITC). This proposed change would increase the refundable tax credit rate for qualifying Canadian-controlled private corporations (CCPCs) from 10 per cent to 15 per cent for eligible investments made on or after May 15, 2025, and before January 1, 2030.
• A temporary expansion of OMMITC eligibility that would provide a 15 per cent non-refundable credit to corporations other than CCPCs. Qualifying corporations for the non-refundable credit would be required to carry on business in Ontario through a permanent establishment in Ontario, and would include public corporations, foreign-controlled corporations and non-resident corporations. This proposed expanded OMMITC would be available for eligible investments made on or after May 15, 2025, and before January 1, 2030.
• A provision to repeal the refundable OMMITC effective January 1, 2030. Expenditures would need to be incurred on or before December 31, 2029, in order to be eligible for the credit. Prior to the expiration, the government will continue to review the OMMITC every three years to assess its effectiveness, compliance burden and administrative costs.  
• Implementation of the temporary Ontario Shortline Railway Investment Tax Credit (OSRITC). The credit would be a 50 per cent refundable corporate income tax credit available to qualifying shortline railways for expenditures of capital and labour directly related to railway track maintenance, repair and improvement in Ontario. The credit would be limited to $8,500 per railway track mile in Ontario owned or leased by a qualifying corporation at the beginning of the taxation year for eligible expenditures incurred on or after May 15, 2025, and before January 1, 2030.
  • To ensure tax integrity and compliance, a certification process would be administered by the Ministry of Transportation. This process would verify the status and track miles of qualifying shortline railways intending to claim the OSRITC prior to the submission of the credit claim to the Canada Revenue Agency. Additional guidance on the certification and application process will be provided on a Ministry of Finance webpage after Royal Assent.

More information on these measures can be found in the 2025 Budget.

Ensuring Flexibility for Machinery and Equipment Expenditures under the Ontario Made Manufacturing Investment Tax Credit

The Ontario Made Manufacturing Investment Tax Credit (OMMITC) was introduced in the 2023 Budget to encourage investment in manufacturing and processing. It is a refundable corporate income tax credit for eligible expenditures in buildings as well as in machinery and equipment (M&E) used in the manufacturing or processing of goods in Ontario.

Under the current rules, eligible expenditures in M&E must be incurred and the related assets become available for use in the same taxation year. In contrast, eligible expenditures in buildings can be incurred in any year previous to the year the building becomes available for use.

“Available for use” refers to the rules set out in the federal Income Tax Act that determine the taxation year in which a taxpayer can start to claim Capital Cost Allowance (CCA) for a depreciable property.

In some instances, there may be a lag between the purchase of an M&E asset and when it becomes available for use. For example, the M&E expenditure may be incurred in one year, and only become available for use in the next year, which can render the related expenditure not eligible for the OMMITC. To account for this timing difference and provide greater flexibility, the government is proposing amendments to the Taxation Act, 2007 that would allow M&E expenditures to be eligible if incurred in the taxation year immediately preceding the taxation year that the asset becomes available for use. 

If implemented, this amendment would apply to expenditures incurred prior to the amendment’s enactment and on or after March 23, 2023. This amendment is proposed to apply to the refundable OMMITC, including the enhancement, and would also be adopted in the non-refundable OMMITC available to corporations other than CCPCs.

Attracting Foreign Industrial Investment to Ontario

The province will amend a regulation under the Land Transfer Tax Act that is related to the
Non-Resident Speculation Tax (NRST) to support economic investment in Ontario. A new NRST rebate would provide relief for the purchase of a residential property that has been repurposed for industrial use. The rebate would be available for conveyances of property occurring on or after November 6, 2025.

To qualify, a property would have to be reclassified into the Industrial Property Class, Large Industrial Property Class, or Aggregate Extraction Property Class as defined under the Assessment Act with respect to a year that is no later than four years after the purchase.

Establishing a Beneficial Ownership Registry

Ontario is proposing amendments to the Corporations Information Act to enable the creation of a Beneficial Ownership Registry for privately held business corporations that would be implemented in 2027.

The Business Corporations Act already requires privately held business corporations to collect and maintain specified information about individuals with significant control, including:

• name;
• date of birth;
• latest known address;
• jurisdiction of residence for tax purposes;
• the day on which each individual became, and if applicable, ceased to be an individual with significant control;
• a description of how the individual has control over the corporation; and
• any other prescribed information.

Law enforcement, tax authorities and regulatory bodies identified in section 140.3 of the Business Corporations Act are currently only able to access this information through a request to the corporation, which impedes investigative efforts.

The proposed amendments would enable corporations subject to section 140.2 of the Business Corporations Act to file required information on beneficial owners through an online registry, subject to further legislation and regulations to support implementation. In addition, entities identified in section 140.3 of the Business Corporations Act would be granted access to some or all of the information filed on a registry.

Summary of Measures

Table A.1 reflects the cost of tax measures proposed or implemented in this document.

Technical Amendments

Amendments are being proposed to various statutes administered by the Ontario Minister of Finance, or other statutes, to improve administrative effectiveness or enforcement, maintain the integrity and equity of Ontario’s tax and revenue collections system, or enhance legislative clarity or regulatory flexibility to preserve policy intent.

Proposed legislative amendments include:

• Amendments to the Employer Health Tax Act to provide a specific time frame for employers who cease to have a permanent establishment in Ontario, due to an amalgamation, to file their returns.
• Amendments to the Education Act and Assessment Act to support and simplify property tax administration.
• Amendments to the Taxation Act, 2007 to:
  • clarify how the occupancy cost under the Ontario Energy and Property Tax Credit is to be calculated for land-lease homes and similar arrangements where the ownership of the residential structure is separate from the ownership of the land on which the residential structure is located;
  • clarify how dollar amounts related to the Ontario Trillium Benefit and the Ontario Child Benefit are adjusted each year based on the Consumer Price Index for Ontario;
  • change the amount “0.6987” in the formula for the Small Beer Manufacturers’ Tax Credit to “0.6986” to properly align with the Liquor Tax Act, 1996; and
  • update various references in the Act to reflect current provisions and clarify the French version of the Act to use terminology that is consistent with the English version.
• Amendments to the Insurance Act to:
  • explicitly provide the Financial Services Regulatory Authority of Ontario with authority for its life and health insurance managing general agent transition rules to temporarily override the Act; and
  • enable the reassessment and adjustment of previously conducted Assessment of Health System Costs.

Other Legislative Initiatives

Additional proposed legislative amendments include:

• Amendments to the Insurance Act to allow the Lieutenant Governor in Council to distinguish “public sector reciprocal insurance exchanges” from other reciprocal insurance exchanges and establish a governance framework for these reciprocals to ensure alignment with the public interest.
• Amendments to the Connecting Care Act, 2019 to specify the financial status of Ontario Health and Ontario Health at Home under the Financial Administration Act to reflect current practices in relation to the Consolidated Revenue Fund.
• Amendments to repeal sections 3–5 of the Cap and Trade Cancellation Act, 2018.
• Amendments to the Rebuilding Ontario Place Act, 2023 to broaden existing authorities that would help support the provincial government to streamline land use, access City of Toronto infrastructure and land, and remove procedural barriers to ensure a more efficient delivery of the Ontario Place Redevelopment Project.
• Amendments to the Election Act to remove the requirement for general elections to occur on fixed election dates, returning Ontario to the long-standing tradition in which elections take place on a date to be determined by the Lieutenant Governor, on the advice of the Premier.
• Amendments to the Election Finances Act to repeal pre-writ political advertising spending limits, permanently extend quarterly allowances for political parties, increase contribution limits to political parties, and strengthen investigation and enforcement mechanisms to better promote compliance with Ontario’s election laws.