Ontario Budget 2012: An Indication Of Things To Come

The Ontario government presented its 2012 Budget (the "Budget") in the Ontario Legislature earlier this week. While largely focusing on austerity measures and spending restraint, the Budget also raised the possibility of a number of material tax changes that, if implemented, will directly affect those that carry on business in Ontario.

Tax rate reductions suspended

As has been widely reported in the popular press, the most significant tax announcement contained in the Budget was the Government's decision to freeze the implementation of certain planned tax rate reductions.

• Ontario's current general corporate income tax rate of 11.5% (26.5% when combined with the general federal corporate income tax rate) was scheduled to decline to 11% on July 1, 2012 and 10% on July 1, 2013. The Budget proposes to delay these scheduled tax rate reductions until the province's budget is balanced, which is currently projected by the Government to occur in 2017-2018.