Ontario’s new Conservative government is scrapping changes to the province’s personal income tax (PIT) regime that were proposed in the previous government’s 2018 provincial budget.
The government announced the shift Thursday in Ontario’s fall fiscal update.
In the 2018 Ontario budget, the Liberals proposed eliminating the surtax from the PIT, and introducing two new tax brackets, while adjusting the tax rates to make up for the loss of revenue from the elimination of the surtax.
The two new tax brackets, which increased the total number of brackets to seven from five, would have been from $71,501 to $82,000 and $82,001 to $92,000, respectively. The top provincial bracket remained the same at $220,000 and above.
Under the proposed changes, high-income earners would have seen their provincial income tax increase modestly, while lower income earners would seen their provincial taxes remain the same or decrease modestly. The proposed change were made to simplify the province’s PIT regime and to make it fairer, the Ontario Liberals argued.
In reversing the Liberals’ proposed changes, the Conservative government estimates that approximately 1.8 million Ontarians would be spared an increase of $200 in their provincial PIT.