William Khalilieh CPA Professional Corporation
Providing Accounting and Tax Solutions to Small Businesses in the GTA

Ontario Budget

2015 ON Budget Summary & Analysis

The Ontario government delivered the 2015 Budget today. Here are the highlights that will have an impact on you and your Oakville small business:

Personal Tax Changes

No changes were announced to personal tax rates. However, with the change to the federal dividend tax credit (see my 2015 Federal Budget Summary and Analysis here), the top marginal tax rate on non-eligible dividends (basically dividends from companies that get the Oakville small business deduction or have investment income) will increase as follows:

  • 2015: 40.1%
  • 2016: 40.4%
  • 2017: 41.0%
  • 2018: 41.2%
  • 2019: 41.4%

If you have income from one of these types of corporations, especially from those that generate investment income, you may want to think about taking dividends out sooner rather than later.

Ontario is also moving to parallel the federal rules when it comes to trusts and estates that were announced in the 2014 Federal budget. The most significant change is that estates have 3 years during which it can benefit from marginal tax rates. Afterwords, estates are taxed at the highest tax rates. Those with a person with a disability as a beneficiary are exempt from this change.

While technically not a tax increase, be aware of increases in user fees, such as those for drivers and vehicles, hazardous waste, and family courts.

Of course, I can’t forget the beer tax. It was announced last week that the cost of a 24-case will increase by 25 cents per year until 2018.

Business Tax Changes

No changes were announced to corporate tax rates.

Other issues of note:

  • Ontario continues to develop its version of the CPP, known as the Ontario Retirement Pension Plan
  • Ontario is restricting or eliminating some of their specialized tax credits, including two of the more mainstream credits: The Apprenticeship training tax credit and the Ontario interactive digital media tax credit
  • Ontario continues to combat the underground economy with a focus on residential roofers this year and auto-body repair shops next year
  • Introducing laws to make “zappers” illegal
  • Ontario wants to enter into information sharing agreements, including with municipalities

This analysis is intended as a brief overview and does not include all of the details to help you take advantage of these rules as applicable. Please contact me to see how these changes can impact you and your Oakville small business. 

William Khalilieh is a Chartered Professional Accountant, based in Oakville, Ontario, who provides practical tax and accounting solutions to individuals and their businesses in the Greater Toronto Area.