Minister of Finance Peter Bethlenfalvy, of the Canadian province of Ontario, presented the 2025 Ontario Budget: A Plan to Protect Ontario on 15 May 2025. It confirms no new changes to corporate or personal income tax rates. However, qualifying businesses can defer select Ontario tax payments from 1 April to 1 October 2025. It also expands the Ontario Made Manufacturing Investment Tax Credit and indefinitely extends reduced gasoline and fuel tax rates, among other policy updates.

The budget measures aim to protect Ontario workers, businesses and jobs in the face of US tariffs and continued economic uncertainty, with a plan to build an economy that is more resilient and self-reliant. It further claims the government’s goal to transform Ontario into the most competitive place to invest, create jobs and do business in the G7, while investing even more in health care, education and other critical services.

“Our government is delivering on our mandate to protect Ontario and help workers and businesses weather the storm, while creating the long-term foundations for a strong, resilient and competitive economy,” said Minister Bethlenfalvy. “We’re making the investments in workers, infrastructure and services that will protect Ontario, no matter what.”

Ontario made manufacturing investment tax credit (OMMITC)

This initiative aims to support businesses in Ontario that invest in buildings, machinery, and equipment for manufacturing or processing. It proposes enhancements and expansions to the Ontario Made Manufacturing Investment Tax Credit (OMMITC).

The OMMITC is a 10%  refundable corporate income tax credit available to Canadian-controlled private corporations (CCPCs) that make eligible investments in Ontario.

The proposed changes would temporarily raise the tax credit rate for Canadian-controlled private corporations (CCPCs) from 10% to 15% and expand eligibility for a 15% non-refundable credit to non-CCPCs, including public corporations, making eligible investments in the province.

Permanently reducing fuel tax rates

The proposal will make the province’s gasoline and fuel tax cuts permanent. On 1 July 2022, the Ontario government temporarily cut the gasoline tax rate by 5.7 cents per litre and the fuel (diesel) tax rate by 5.3 cents per litre.

The gasoline and fuel tax rates are currently 9 cents per litre. These tax rate reductions will end on 30 June 2025, when the rates will return to 14.7 cents per litre for gasoline and 14.3 cents per litre for fuel.

On average, this initiative would save households approximately CAD 115 annually.

Six-month tax deferral to support businesses impacted by US tariffs

This initiative defers select provincial taxes for six months, from 1 April to 1 October 2025, to help businesses cope with US tariffs. It will provide about 80,000 businesses and job creators with CAD 9 billion in cash flow to keep workers employed.

Eliminating the tax on propane for use in licensed road vehicles

The government proposes amendments to the Gasoline Tax Act and Fuel Tax Act, eliminating the tax on propane used in licensed road vehicles, effective 1 July 2025.

Enhancing the small beer manufacturers’ tax credit

The Taxation Act 2007 offers a refundable corporate tax credit for small beer manufacturers (SBMTC). Beer manufacturers with permanent establishments in Ontario may qualify for credit for eligible sales of draft and non-draft beer in Ontario, provided they meet certain production limits.