If there’s any way to describe the 2018 Ontario budget, it’s the word “free”. From free preschool daycare to free university tuition, to free drugs for those age 65 and over, there’s freebies for everyone—and lots of tax credits too.
Low-income earners and social assistance recipients
For those on social assistance, limits on savings in TFSAs and RRSPs will be eliminated and new applicants will not have to spend down these accounts before qualifying for payments.
Allowable limits on cash and other liquid assets (outside of TFSAs and RRSPS) for those receiving social assistance will now increase from $10,000 to $15,000 for singles, and from $15,000 to $20,000 for couples.
The amount of time that qualifies as “living together” for the definition of a “spouse” will change from three months to three years. As a result, someone receiving social assistance will be able to live with a partner they’re not married to for three years before the income and assets of the partner are taken into account in determining eligibility for social security.
Employment income that can be earned without impacting social assistance benefits will increase to $400 monthly from $200 per month. In 2019-2020, the amount that can be earned will increase to $6,000 per year.
Continued cuts of up to 50% on residential electricity bills for people with low incomes as well as those living in remote communities.
A new Seniors’ Healthy Home Program benefit that helps seniors with the costs of maintaining their home by providing $750 per year for every eligible household headed by a senior 75 years of age or older.
Free prescription drugs for everyone 65 and over through OHIP+. By eliminating the Ontario Drug Benefit annual deductible and co-pay, this saves the average Ontario senior $240 per year.
Provides a free shingles vaccine for seniors between the ages of 65 and 70, a savings of about $170.
A new Ontario Drug and Dental Program that will reimburse 80%—up to a maximum of $400 per single person, $600 per couple and $700 for a family of four with two children—of eligible prescription drug and dental expenses each year, for those without workplace health benefits or not covered by OHIP or other government programs.
Free licensed child care for preschool-aged children from two-and-a-half to kindergarten age—meaning free full-day preschool. When fully implemented, an average Ontario family with a preschool-aged child could save over $17,000 in licensed child care costs while a family with two children could save almost $35,000 on average. In Toronto, those savings are higher at $20,000 and $40,500, respectively.
Parents with autistic kids will be given the choice of receiving services from a regional provider or receiving direct funding to purchase services for their child through a qualified provider. To ensure greater flexibility, the maximum hourly rate will be raised 41% to $55 an hour.
Makes college and university tuition free for more than 225,000 students of all ages. Free or low tuition is available for students from low- and middle-income families; tuition is free for those earning up to $90,000, and students from families who earn up to $175,000 are also eligible for financial aid.
A fare discount for PRESTO card users who transfer between GO Transit or the UP Express and the TTC. All Go Transit trips within Toronto will cost PRESTO card users just $3 per trip. As well, card users at stations such as Port Credit, Malton, Pickering, Ajax and Markham will also see fare reductions when taking GO Transit back and forth to Union Station. All GO Transit trips under 10 kilometres will cost PRESTO card users just $3 per trip anywhere on the GO network.
Expanding the Ontario Youth Apprenticeship Program (OYAP), providing more high school students with trades-related hands-on learning opportunities.
New net tuition billing will be introduced, meaning that a student will receive on bill from their university/college which has already subtracted the amount of OSAP grant and loan funding and potential aid received from their post-secondary school.
Creating free online textbooks and education resources for students to make college and university more affordable and accessible.
Making OSAP loan repayment more flexible. Single students will not have to start repaying the Ontario portion of their student loans until they are earning a minimum of $35,000 a year, a $10,000 increase from the previous minimum of $25,000.
The budget eliminates the provincial Ontario’s surtax and replaces it with new tax rates and brackets. Those earning more than $71,500 in taxable income will likely see a small tax increase, depending on charitable donations made and non-refundable tax credits. As an example, someone earning $95,000 in taxable income would no longer pay surtax. Instead, if they claimed the Basic Personal, CPP and EI amounts (non-refundable tax credits), this individual would pay $168 more in tax, but could pay less or no tax if they claimed more non-refundable tax credits.
The Ontario Charitable Donations Tax Credit (OCDTC) rate will rise to 17.5% for all taxpayers for eligible donations over $200. The aim is for all taxpayers to get the same value for their charitable donation. Tax relief from a $2,000 charitable donation would be $325 for everyone (as opposed to $211 in tax relief right now from the non-surtax payer and $253 for the surtax payer at a first-year 20% rate.)
To improve the benefit security for plan members and retirees, the Stronger, Fairer Ontario Act, will increase the Pension Benefits Guarantee Fund (PBGF) guarantee by 50% from $1,000 to $1,500 per month, and eliminate the age and service requirements for PBGF coverage. This would cover retroactively plans with a wind-up date on or before March 19, 2017 so pension benefits provided to former Sears employees.
Will give consumers online access to their current consumer score at least two times per year, free of charge.
The Ontario Research and Development Tax Credit (ORDTC) is a 3.5 per cent non-refundable tax credit on eligible R&D expenditures. Effective for eligible R&D expenditures incurred on or after March 28, 2018, companies that qualify for the ORDTC would be eligible for an enhanced rate of 5.5 per cent on expenditures over $1 million in a taxation.
Improvements to the eight per cent Ontario Innovation Tax Credit (OITC) for small to medium-sized companies on eligible R&D expenditures to gross revenues that is between 10 per cent and 20 per cent, the company would be eligible for an enhanced OITC rate that would increase from eight per cent to 12 per cent on a straight-line basis as the company’s ratio of R&D expenditures to gross revenue increases from 10 per cent to 20 per cent. Above 20 per cent the company would be eligible for the OITC at a 12 per cent rate.
Ontario will parallel the federal government’s income sprinkling by extending the tax on split income rules to adult family members who are not active in the business, with certain exceptions, beginning with the 2018 taxation year. As well, it will apply its top PIT rate of 20.53 per cent to split income received by an adult family member. It will also mirror federal measures on passive investment income.
Cigarette taxes are going up by $4 per carton of cigarettes this year and an additional $4 per carton next year.
Expanding rent control to all private market rental units (rented homes, semis, basement apartments and condo rentals) across the province to protect tenants from unfair rent increases.