The 2012 Ontario budget proposed to freeze the general corporate income tax rate at the current 11.5% level until the budget is balanced. Previously, the government intended to reduce the rate to 11% on July 1, 2012 and to 10% on July 1, 2013. The budget forecasts that Ontario should return to a balanced budget in 2017-18. The budget stated the corporate tax rate reductions would resume at that time.
We understand that the Ontario government must procedurally first amend the Taxpayer Protection Act before it can introduce legislation to remove the corporate rate reductions already passed into law. After the Taxpayer Protection Act is amended, Ontario will then have to introduce another bill (in 2012) to amend Ontario's Taxation Act, 2007 to remove or defer the reductions currently enacted for 2012 and 2013.
For more information, contact your KPMG adviser.