The Ontario government tabled a 346-page budget Thursday. According to Brad Sinclair, CPA, CA, from Millards Chartered Professional Accountants the 2016 budget contains bold promises and as well as some some small tax changes.
Brad Sinclair
CPA, CA, Partner
Millards Chartered Professional Accountants
“One of the unexpected announcements is free tuition for lower-income students.”
Students from households with an average annual income below $50,000 will receive free tuition. Free tuition will also be offered to qualified graduate students. A large percentage of students from households earning less than $83,000 a year will also pay no or low tuition as the result of grant programs.
“Higher income families will either see a reduction in fees or pay the same amount. The government is currently reworking grant programs in an effort to streamline the process and make programs more accessible. It may be status quo for many families but certainly good news for low income students thanks to an to overhaul of the Ontario Tuition Grant program”
One of the budget announcements will have a direct and positive impact on Brantford and the surrounding area.
“The budget pledged improvements to GO transit and we will benefit as a result. MPP Dave Levac announced new GO bus routes from Brantford to the Hamilton area and a dedicated GO bus to Aldershot during rush hour. That’s exciting for Brantford as it finally connects us to a major transportation corridor”
Other budget perks include the elimination of the $30 Drive Clean fee for emissions testing and free shingles vaccinations for seniors between 65 and 70, a savings of $170.
The new Ontario budget also offers small improvements for those on welfare or disability.
“Singles on Ontario Works will receive a $25-a-month increase and those relying on Ontario Works and the Ontario Disability Support Program will get a 1.5 per cent rate hike.”
On the healthcare front, the budget promises cheaper parking for frequent hospital visitors. The annual deductible rate for many seniors on public drug benefits will increase to $170 from $100 while another 170,000 low-income seniors will pay less for their prescription medications.
The government has also increased funding for health-care sectors identified as priorities including palliative care, cancer care services and $333 million to “redesign and consolidate” services for children and youth with autism.
Sinclair says that while the $133-billion spending plan offers financial benefit for some, it will make life more expensive for others.
“The average household could pay about $8 more per month in gas costs as gasoline prices increase by 4.3 cents per litre next year as part of the new cap-and-trade program.”
Homeowners will pay approximately $5 more in monthly natural gas costs by 2017 as gas rates rise 3.3 cents per cubic metre.
The minimum price for a bottle of table wine will be set at $7.95 and wine taxes will be raised by an average of 10 cents a bottle as part of the expansion of sales in supermarkets. The LCBO will be permitted to increase the markup on wine to match spirits and beer.
In a move to increase smoking cessation, tobacco taxes will be raised $3 per carton. A small pack of 20 cigarettes will go up by at least 30 cents.
The province has promised $5 million over three years to increase education about the treatment of indigenous children by Canadian institutions, as recommended in the Truth and Reconciliation report. Brantford is home to a former residential school.
Some of the smaller budget changes is the end of the little-used tax credit designed to encourage seniors to renovate their homes so they can stay in them longer. Also ending is the children’s activity tax credit, which gave families an average of $70 for sports, arts, and cultural programs for their kids.
The deficit for the 2015 year ending March 31 has fallen to $5.7 billion. It’s expected to drop to $4.3 billion before returning to balance in 2017/18.
“That deficit reduction plan relies on squeezing new revenues, cutting costs and continued economic growth. Only time will tell if the Liberals new plan will be effective.”
Click here to download the 2016 Ontario Budget Commentary
Do you have questions about the Ontario Budget Commentary or the 2016 Ontario Budget? Millards has 7 Southern Ontario locations to serve you. Contact us today and find out more about how the budget may impact your family or business.
Brad Sinclair’s Practice Areas include design and implementation of tax minimization strategies for businesses and their owners as well as personal and corporate tax planning. He is intimately familiar with the role that budgets have on Millards’ clients.
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