2009 Ontario Budget Impact Paper

The 2009 Ontario budget that was presented by the Honourable Dwight Duncan, Minister of Finance for the Government of Ontario on March 26, 2009, was reviewed and contained no new income tax measures affecting federal public service pay or pension payments for 2009. However, there are some personal tax measures that employees may find informative from a personal perspective that were announced for 2010.

ITEMS OF INTEREST

Personal Income Tax relief to come into effect as of January 1, 2010

The government is proposing to reduce the lowest tax rate by one percentage point, from 6.05% to 5.05%, effective January 1, 2010.

Impact: The Public Works and Government Services Canada (PWGSC) compensation systems will be programmed to change the tax rate effective January 1, 2010.

Changes to Ontario Surtax

The government is proposing to adjust the 20% surtax levied on basic Ontario tax over $4,257 and the 36% surtax levied on basic Ontario tax over $5,370 to 20% surtax over $3,978 and 36% surtax over $5,091, effective January 1, 2010.

Impact: This change will be incorporated into the 2010 income tax return.

Ontario Sales Tax is to be combined with the federal GST effective July 1, 2010

The government proposed that, effective July 1, 2010, Ontario's retail sales tax will be combined with the federal goods and services tax (GST) to create a federally administered single sales tax. The single sales tax would have a combined tax rate of 13 per cent. The single sales tax will generally use the same rules and tax base as the federal GST.

Ontario Sales Tax Transition Benefit

As part of the Ontario sales tax reform proposed in the budget, an Ontario Sales Tax Transition Benefit will be provided to eligible individuals and families as follows:

• Benefits will be delivered to eligible Ontario tax filers aged 18 and over.
  
  
• Eligible families with an income of $160,000 or less will receive three payments totalling $1,000.
  
  
• Eligible single people with an income of $80,000 or less will receive three payments totalling $300.
  
  
• The first benefit will arrive in June 2010, the second in December 2010, and the third in June 2011.
  
  

To review the 2009 Ontario Budget documents, please visit the following Web site:

http://www.fin.gov.on.ca/english/budget/ontariobudgets/2009/papers_all.html