- 2% reduction in the Ontario Innovation Tax Credit (OITC): from 10% to 8%
- 1% reduction in the Ontario Research and Development Tax Credit (ORDTC): from 4.5% to 3.5%
- If June 1 is more like the middle of your fiscal year (if Dec. 31 is your fiscal year end for example) then the rate reductions will be prorated
Those percentages may look small, but scale them up to an example claim and you get a better idea of the scope of the changes.
On $10,000 claimed dollars, the prescribed proxy is $5,500 / 55%, for a total expenditure of $15,500. Before the rate reduction goes into effect, you would have OITC at 10% for $1,550, plus ORDTC at 4.5% for $627.80. After the rate reduction, 8% OITC would get you $1,240, and 3.5% ORDTC would get you $499.10. These figures exclude the Federal ITC.
With the Wynne government’s increased focus on tax cuts for low-income households, there is some discussion about whether tax cuts for business are taking a hit to compensate. However, the budget will purportedly increase funding to the Ontario Centres of Excellence and organizations like it, in order to soften the blow.