OTHER MEASURES

Property Taxes

Commencing in 2003, the government will prescribe standard percentage deductions in the valuation of hotels for property tax purposes to ensure that all hotels are fairly assessed relative to other commercial property in Ontario. The standard deduction for management expenses will be 5% and the standard deduction for chattels will be 15%. The Municipal Property Assessment Corporation will have the discretion to apply different percentages in unique circumstances.

In addition, the name of two property classes will be changed from the "residential/farm property class" to the "residential property class" and from the "farmlands property class" to the "farm property class".

Municipalities will be provided with the flexibility to lower municipal property taxes on farm properties commencing in 2003. Upper-tier and single-tier municipalities will be able to lower the municipal portion of the tax rate below 25% of the residential rate. This reduction applies to both the upper-tier and lower-tier portions of the municipal property tax rate.

In addition, government-owned farms are currently not eligible for inclusion in the farmlands property class. These farms will become eligible for inclusion in the farm property class (formerly the farmlands property class) if they are occupied by tenant farmers.

Tobacco Taxation

The rate of tax on cigarettes and cut tobacco will be increased by 2.5 cents per cigarette or gram of cut tobacco, effective 12:01 a.m., June 18, 2002. For cigarettes, this increase amounts to $5 per carton of 200 cigarettes. To address tax evasion, Ontario proposes to amend the structure of tobacco taxation by exempting tobacco products from the Retail Sales Tax Act and recovering the revenues through an equivalent increase in rates under the Tobacco Tax Act. The new proposed tax rates, in combination with this restructuring, are 8.6 cents per cigarette, tobacco stick or gram of cut tobacco and 56.6% of the retail price of cigars.

Fuel Taxes

Purchases of biodiesel fuel made after June 17, 2002 are exempt from the 14.3 cent per litre tax under the Fuel Tax Act. This exemption is available regardless of whether the biodiesel fuel is mixed with diesel fuel.

Community Small Business Investment Funds Act

The deadline for registering a new Community Small Business Investment Fund is proposed to be extended from December 31, 2002 to December 31, 2003.