Measures Announced by the Ontario Government for Businesses

March 26, 2020 

Workplace Safety and Insurance Board (WSIB) payments

Ontario will provide employers with approximately $1.9 billion in relief by allowing them to defer WSIB payments for up to six months. Specifically, Schedule 1 employers (i.e., employers operating under the collective liability insurance principle) that owe premiums to the WSIB may defer reporting and payments until 31 August 2020. Deferral is also available to Schedule 2 organizations (i.e., employers that are individually responsible for the full cost of accident claims filed by their workers). During this deferral period, interest will not accrue on outstanding payments and no penalties will be charged.

Tax Measures

Doubling of 2020 Employer Health Tax (EHT) exemption

Currently, the first $490,000 of payroll is exempt from Ontario EHT for eligible private-sector employers. This exemption must be shared by an associated group of employers. Employers that qualify for the exemption pay EHT at a rate of 1.95% on payroll in excess of $490,000. However, the exemption is eliminated for private-sector employers (including groups of associated employers) with annual Ontario payrolls over $5,000,000. Employers that do not qualify for the exemption are subject to graduated rates ranging from 0.98% to 1.95%, with the 1.95% rate generally applicable for payrolls over $400,000.

Ontario will retroactively raise the EHT exemption from $490,000 to $1,000,000 for 2020. The exemption will return to $490,000 on 1 January 2021. EHT for an eligible employer with a payroll of $1,300,000 in 2020, for example, will be reduced from $15,795 (($1,300,000 - $490,000) x 1.95%) to $5,850 (($1,300,000 - $1,000,000) x 1.95%). 

Extended filing and payment deadlines

Filing and remittance deadlines will be deferred for a period of five months, from 1 April 2020 to 31 August 2020, for the following provincially administered tax programs:

• Employer Health Tax
• Tobacco Tax
• Fuel Tax
• Gas Tax
• Beer, Wine and Spirits Taxes
• Mining Tax
• Insurance Premium Tax
• International Fuel Tax Agreement
• Retail Sales Tax on Insurance Contracts and Benefit Plans,
• Race Tracks Tax

Penalties and interest will not apply to late returns or remittances made under these tax programs during this five-month period. This measure is in addition to the deferral to 1 September 2020 (announced on 18 March 2020 by the federal government) for income tax balances and instalments that become owing on or after 18 March 2020 and before September 2020.

Regional Opportunities Investment Tax Credit

Ontario is introducing a 10% refundable corporate income tax credit for Canadian-controlled private corporations that make eligible capital investments that become available for use on or after 25 March 2020 in specified regions of Ontario. Qualifying investments include expenditures for capital property included in Class 1 and Class 6 for capital cost allowance purposes. Examples include expenditures for constructing, renovating or acquiring eligible commercial and industrial buildings. The tax credit will be available for qualifying expenditures over $50,000 and up to $500,000 in a taxation year. The specified regions are generally located in Northern Ontario, Eastern Ontario (other than the Ottawa region) and Southwestern Ontario.

Postponement of property tax reassessment 

The property valuation update or reassessment, scheduled to be completed by the Municipal Property Assessment Corporation in 2020 for the 2021 taxation year has been postponed. Therefore, assessments for the 2021 taxation year will continue to be based on the same valuation date that was in effect for the 2020 taxation year.

Measures announced by the Ontario government for businesses