Building a Strong Ontario Act (Budget Measures), 2023, S.O. 2023, c. 8 - Bill 85

• Jurisdiction: Ontario
• Date: 18 May 2023
• Bill Number: 85

EXPLANATORY NOTE

This Explanatory Note was written as a reader’s aid to Bill 85 and does not form part of the law. Bill 85 has been enacted as Chapter 8 of the Statutes of Ontario, 2023.

SCHEDULE 1
DEDICATED FUNDING FOR PUBLIC TRANSPORTATION ACT, 2013

The Schedule amends the Dedicated Funding for Public Transportation Act, 2013, which provides that a portion of the tax that is paid to Ontario under the Gasoline Tax Act in each fiscal year be dedicated to the provision of grants to municipalities for public transportation. Subsection 1 (2) of the Act sets out the calculation for determining the portion of the tax that is dedicated to that purpose. Currently, subsection 1 (2) refers to the tax rate per litre of gasoline that is specified in clause 2 (1) (b) of the Gasoline Tax Act for the purposes of that calculation. Subsection 1 (2) is re-made to provide instead that the amount of the portion of the tax for a fiscal year be calculated using the tax rate per litre of gasoline in effect for that fiscal year under section 2 of the Gasoline Tax Act. A new subsection 1 (2.1) is added to the Act that sets out how the portion is to be calculated for a fiscal year during which more than one tax rate was in effect.

SCHEDULE 2
FINANCIAL PROFESSIONALS TITLE PROTECTION ACT, 2019

The Schedule amends the Financial Professionals Title Protection Act, 2019 to give the Authority the power to make rules governing the use of protected titles in certain circumstances. Clause 15 (2) (d) of the Act is also repealed.

SCHEDULE 3
FUEL TAX ACT

The Schedule amends the Fuel Tax Act.

The definition of “fuel” in subsection 1 (1) is amended to exclude hydrogen.

Subsection 13 (12) authorizes the Minister, when assessing an interjurisdictional carrier who has not kept adequate books of account, to deem certain vehicles to have travelled a distance of 1.6 kilometres per litre of fuel consumed. The subsection is amended to allow the Minister to deem the vehicles to have travelled a distance of 1.7 kilometres per litre of fuel consumed or to reduce the carrier’s reported kilometres per litre by 20 per cent.

SCHEDULE 4
GASOLINE TAX ACT

The Schedule makes the following amendments to the Gasoline Tax Act:

1. The definition of “gasoline” in subsection 1 (1) is amended to exclude hydrogen and the definition of “fuel” for the purposes of section 34 is amended to include “hydrogen”.

2. Currently, the definition of “propane” in subsection 1 (1) is defined with reference to Standard CAN/CGSB-3.14-M88 of the National Standards of Canada. The definition is amended to replace reference to that standard with reference to Standard CAN/CGSB-3.14.

3. New subsection 2 (4.3.1) imposes a tax rate of 0 cents per litre on hydrogen used by an interjurisdictional carrier in Ontario to generate power in a qualified motor vehicle.

4. Currently, Subsections 4.1 (4.1) and 4.2 (3) provide penalties for unregistered importers and exporters that import or export gasoline. These subsections are amended to also provide for penalties for unregistered importers or exporters that import or export aviation fuel or propane.

5. Subsection 11 (18) currently authorizes the Minister, when assessing an interjurisdictional carrier who has not maintained adequate books of account, to deem certain vehicles to have travelled 1.2 kilometres per litre of gasoline consumed or 1 kilometre per litre of propane consumed. The subsection is amended to allow the Minister to deem the vehicles to have travelled a distance of 1.7 kilometres per litre of gasoline or propane consumed or to reduce the carrier’s reported kilometres per litre by 20 per cent.

SCHEDULE 5
INSURANCE ACT

Section 121.0.1 of the Insurance Act is amended to provide the Financial Services Regulatory Authority of Ontario with the authority to make rules governing what constitutes an individual variable insurance contract.

SCHEDULE 6
LIQUOR TAX ACT, 1996

The Schedule amends the Liquor Tax Act, 1996.

Sections 23 and 24 of the Act are retroactively amended effective November 29, 2021. Immediately prior to November 29, 2021, a purchaser of draft or non-draft beer manufactured by a beer manufacturer was required to pay a volume tax and an environmental tax in respect of the purchase in accordance with those sections. On November 29, 2021, those sections were amended to provide that the volume tax and environmental tax was payable in respect of draft or non-draft beer generally. These sections are amended retroactively to provide that they apply to draft beer manufactured by a beer manufacturer or one of its affiliates.

Subsection 17 (1) of the Act is amended to provide for two new definitions, “onsite winery retail store” (a winery retail store that is located on the licensee’s production site) and “offsite winery retail store” (a winery retail store that is not located on the licensee’s production site). The definitions of “authorized grocery store” and “wine boutique” are repealed. In light of this change in terminology, amendments are made to sections 27, 28 and 29, which provide for the basic tax, volume tax and environmental tax payable in respect of purchases of wine or wine cooler. In addition, section 27 is amended such that a single basic tax of 12 per cent rate applies in respect of the purchase of wine or wine cooler from an off-site winery retail store.

SCHEDULE 7
MINISTRY OF REVENUE ACT

New section 14.1 of the Ministry of Revenue Act authorizes the collection of information and material relating to vessels and aircraft from Transport Canada for specified purposes including the development and evaluation of tax policy. The Minister is required to publish a notice with respect to the collection of personal information under the section.

SCHEDULE 8
ONTARIO GUARANTEED ANNUAL INCOME ACT

The Schedule makes the following amendments to the Ontario Guaranteed Annual Income Act that apply with respect to July 2024 and subsequent months:

1. The amount of the monthly benefit under subsection 2 (4) of the Act is currently reduced by one dollar for every full 24 or 48 dollars, depending on the circumstances. The Act is amended so that the reduction is itself reduced to 50 cents for every full 24 or 48 dollars.

2. Amendments are made so that the amount of the monthly guaranteed annual income increment authorized to be paid under the Act is calculated in the same manner as the monthly benefit under subsection 2 (4) of the Act.

In addition, a new section 1.1 provides for the automatic indexing of the maximum amount of the increment for the purposes of the Act.

SCHEDULE 9
TAXATION ACT, 2007

The Schedule amends the Taxation Act, 2007. Here are some highlights:

1. Currently, section 8 of the Act sets out rules for determining the amount of non-refundable tax credits. Paragraph 13.2 of that section currently sets out rules for determining an individual’s entitlement to the tax credit for unused tuition and education, if the conditions set out in paragraph 13.3 are satisfied. One of those conditions is amended on a retroactive basis to January 1, 2018.

2. The Act is amended by adding a new subsection 9 (14.2), which provides that if an individual was not resident in Ontario on the last day of a taxation year ending after December 31, 2021, the amount of the individual’s tax credit for the year in respect of unused tuition and education tax credits is nil. The amendment is made retroactive to January 1, 2022.

3. Section 24 of the Act imposes the Ontario Health Premium. Various amendments are made to the rules that apply in circumstances where an individual becomes or became a bankrupt. The amendments are effective January 1, 2023.

4. Currently, subsection 31 (5.5) of the Act phases out the small business deduction for corporations having taxable capital employed in Canada between $10 million and $15 million. The small business deduction is eliminated for corporations having more than $15 million of taxable capital employed in Canada. Subsection 31 (5.5) is amended to provide that it applies only to taxation years beginning before April 7, 2022. A new subsection 31 (5.5.1) is added and applies to taxation years beginning on or after April 7, 2022. The new subsection phases out the small business deduction for corporations with taxable capital employed in Canada between $10 million and $50 million. The deduction is eliminated for corporations with more than $50 million of taxable capital employed in Canada. The amendments are made retroactive to April 7, 2022.

5. New section 97.2 provides for the Ontario made manufacturing investment tax credit. The credit is available in respect of eligible expenditures made by a qualifying corporation. The criteria for a corporation to be a qualifying corporation are set out in subsection 97.2 (3). The criteria for an expenditure to be an eligible expenditure are set out in subsection 97.2 (4), which includes requirements that the expenditure be incurred in respect of eligible property. Eligible property is defined in subsection 97.2 (17). Rules are included respecting qualifying corporations that are associated with one or more other qualifying corporations at any time in a taxation year. Consequential amendments are made to sections 84 and 176.

6. Technical amendments are made to section 103.14 of the Act.

SCHEDULE 10
TOBACCO TAX ACT

The Schedule amends the Tobacco Tax Act by repealing the provisions of the Act respecting tear tape, including section 7.1 of the Act, which requires tear tape manufacturers to hold a permit issued by the Minister.

In addition, various amendments are made to the French version of the Act.

chapter 8

An Act to implement Budget measures and to amend various statutes

Assented to May 18, 2023

CONTENTS

His Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Contents of this Act

1 This Act consists of this section, sections 2...