Canadian Tax Adviser, April 26, 2016. Bill 173, which implements certain measures in Ontario’s 2016 budget, received Royal Assent on April 19, 2016. Since Bill 173 received first reading on February 25, 2016, the corporate tax measures in Bill 173 are considered to be substantively enacted for purposes of IFRS and ASPE as of February 25, 2016 (because Ontario has a majority government). Bill 173 is considered enacted for U.S. GAAP purposes on April 19, 2016, the date that it received Royal Assent.
Bill 173 contains corporate tax measures to reduce rates for the Ontario Research and Development Tax Credit and the Ontario Innovation Tax Credit.
Personal tax measures from Ontario's 2016 budget contained in Bill 173 include the elimination of Ontario tuition and education tax credits for enrolments before September 2017, the application of the top marginal personal income tax rate to split income (to parallel the federal approach to taxing income that is split with certain related children who are minors) starting in 2016, and the discontinuation of the Children’s Activity Tax Credit and the Healthy Homes Renovation Tax Credit as of January 1, 2017.
Bill 173 also contains a change to the calculation of an individual's alternative minimum tax, which had not been included in the 2016 budget. For taxation years after 2015, the minimum tax can no longer be reduced by the dividend tax credit and the foreign tax credit.
As well, on April 21, 2016, Ontario Bill 186 received second reading. This bill enacts the Ontario Retirement Pension Plan Act, 2016, which establishes the Ontario Retirement Pension Plan (ORPP). For more information on the ORPP and the Ontario budget, see TaxNewsFlash-Canada 2016-09, "Highlights of the 2016 Ontario Budget".
For more information, contact your KPMG adviser.
Information is current to April 26, 2016. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500