Ontario’s budget implementation bill, Bill 85, received first reading on March 23, 2023, the same day as its provincial budget. The bill includes the new 10% refundable Manufacturing Investment Tax Credit and changes to phase out the small business deduction for corporations with taxable capital employed in Canada between $10 million and $50 million (previously the phase-out occurred between $10 million and $15 million of taxable capital). This measure, which was announced in Ontario’s 2022 Fall Economic Update, harmonizes with the recent federal amendment to allow more medium-sized Canadian-controlled private corporations to benefit from the small business deduction, and applies for taxation years beginning on or after April 7, 2022.

The corporate income tax measures in Bill 85 are considered substantively enacted for IFRS and Accounting Standards for Private Enterprise (ASPE) purposes on March 23, 2023, the date the bill received first reading (as Ontario has a majority government). These measures will be considered enacted for U.S. GAAP purposes on the date the bill receives Royal Assent.

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Information is current to April 3, 2023. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500.

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