The budget anticipates a deficit of $12.3 billion for 2025-26 and projects deficits of $13.8 billion for 2026-27 and $6.1 billion for 2027-28. Among other changes, the budget decreases Ontario’s small business income tax rate to 2.2% (from 3.2%) effective July 1, 2026, and consequentially increases the non-eligible dividend tax rate (effective January 1, 2027). Although the budget introduces a temporary one-year enhancement of the current rebate related to the provincial portion of the HST for buyers of new houses and condos, the budget also announces that Ontario will eliminate the current provincial portion of the HST rebate for new homes when the temporary enhanced rebate ends. Following the budget release, Ontario released Bill 97, which includes many of the budget measures.
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