Government of Ontario Announces New Budget

Monday, 30 March 2009

Thanks to the new budget, Ontarians will pay a single 13 per cent sales tax as of July 1, 2010 with most households receiving one-time $1,000 payments and personal tax cuts to ease the pocketbook pain, Finance Minister Dwight Duncan announced.

But the new sales tax, which blends the 8 per cent provincial sales tax with the 5 per cent federal GST, will apply to a host of other things that had not been taxed by Ontario. They include gasoline, heating fuel, tobacco, fast food, gym memberships, newspapers, magazines, haircuts, taxi fares, dry cleaning, legal fees, labour on car repairs and golf green fees.

Under the new tax regimen, selected items traditionally exempted from the 8 per cent PST will continue to only be taxed at the 5 per cent GST rate instead of 13 per cent. These are: children's clothing and shoes, child car seats and boosters, diapers, feminine hygiene products, books, and new homes costing under $400,000.

Business was the biggest budget winner. Starting next year, the corporate income tax rate will drop from 14 per cent to 12 per cent and then to 10 per cent by 2013, which is what the federal Conservatives have been demanding. Small business taxes will be reduced to 4.5 per cent from 5.5 per cent and the rate for manufacturing and processing from 16.7 per cent to 12 per cent and finally to 10 per cent.

In a $108.9 billion spending plan, Duncan also reduced the lowest income tax rate to 5.05 per cent from 6.05. It's designed to help the poorest workers, but 93 per cent of Ontarians will benefit.

There is $27.5 billion in provincial stimulus spending on public works projects to complement $5 billion in previously allocated federal money. That should create or support 300,000 jobs.

Buyers of homes costing $400,000 to $500,000 can claim a proportional tax credit. To offset the fact that taxes will rise on nearly everything from Big Macs to new homes costing more than $500,000, families earning $160,000 or less annually will receive $1,000.

Duncan said the business-friendly single sales tax should save corporate Ontario $500 million a year in paperwork costs.

source: http://www.migrationexpert.com/Canada/Visa/canadian_immigration_news/2009/Apr/0/581/Government_of_Ontario_Announces_New_Budget