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2007 Ontario Economic Outlook

Ontario's Economic Outlook and Fiscal Review, delivered on December 13, 2007, includes tax measures that promise limited relief to certain corporations and individuals.

Corporate Tax Changes

The Economic Outlook and Fiscal Review increases Ontario's small business rate threshold to $500,000 retroactive to January 1, 2007.

Capital tax will be eliminated on January 1, 2008 for Ontario companies primarily engaged in manufacturing or resource activities, including forestry.

If a corporation's salaries and wages relate to manufacturing or processing, mining, logging, farming or fishing activities as a percentage of its total salary and wages in Ontario are:

 - 50% or more – capital tax will be eliminated on January 1, 2008;

 - less than 50%, but more than 20% – capital tax will be reduced on a straight-line basis until July 1, 2010, when it will be eliminated, as previously scheduled.

 - 20% or less – capital tax will be eliminated on July 1, 2010, as previously scheduled.

For other corporations, the capital tax rate cuts that were scheduled for January 1, 2009 are accelerated to January 1, 2007.

Both the Ontario Film and Television Tax Credit (OFTTC) and Ontario Productions Services Tax Credit (OPSTC) are increased.

Personal Tax Measures

Land Transfer Tax Refund
The Land Transfer Tax (LTT) Refund Program for First-Time Homebuyers will be expanded to include purchases of resale homes, allowing first-time homebuyers of resale homes to receive a refund of up to $2,000 of LTT. This change will apply to agreements of purchase and sale entered into after December 31, 2007.

Labour-Sponsored Investment Funds
Ontario's Labour-Sponsored Investment Fund maximums are increased to $7,500 and the corresponding tax credit program is extended to 2011.

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