Overview

Ontario Power Generation Inc., each of the corporations’ subsidiaries, and municipal electricity utilities (MEUs), that are exempt from corporate tax are liable to make payments in lieu of federal and provincial corporate tax to the Ontario Ministry of Finance. These payments are known as Hydro PILs.

Hydro PILs are comprised of both federal and provincial components at federal and provincial corporate tax rates.

Hydro PILs tax clients make Hydro PILs payments and submit tax returns to the Ministry of Finance.

Time‑limited relief was introduced in 2016. To encourage private‑sector involvement in the Ontario electricity distribution sector, the time‑limited tax relief measures, including an exemption for capital gains arising under the Hydro PILs deemed disposition rules that had been scheduled to expire on December 31, 2024, were extended until December 31, 2028, as announced in the 2024 Ontario Economic Outlook and Fiscal Review.

Ontario is committed to working with all levels of government to provide support to MEUs to encourage voluntary consolidations, incentivize greater capital investment in infrastructure and ensure better service to customers.

Registering for Hydro PILS

These corporations are exempt from corporate tax and need to register for Hydro PILs with the Ministry of Finance:

  • Ontario Power Generation Inc. and its subsidiaries
  • municipal electricity utilities that generate, transmit, distribute or retail electricity

Before registering an account with the ministry, corporations need to first register with ServiceOntario for an Ontario corporation number.

Register your business now

After registering your business, request a Hydro PILs tax account with the Ministry of Finance.

Download and complete the registration form

If you have any questions, please call the ministry at Toll-free: 1-866-668-8297.

Filing a Hydro PILs tax return

For tax years ending on or after January 1, 2009, corporations need to file a T2 corporation income tax return. Returns can be filed by mail, in person, or electronically, using ONT‑TAXS online.

More about the T2 corporation income tax return

To file a Hydro PILS tax return electronically, login to ONT‑TAXS online and upload:

  • the Hydro PILs T2 return in a .COR data file format
  • a PDF copy of the corporation’s T2 return
  • the corporation’s financial statements and/or supporting documents in a PDF, TXT, DOC, XLS or PPT file format

Read: Guide T4012, T2 Corporation — Income Tax Guide

About ONT‑TAXS online

Where to send your Hydro PILs return

All returns and payments should be sent to:

Ministry of Finance
33 King Street West
PO Box 620  
Oshawa ON L1H 8E9

Do not send your Hydro PILs returns and payments to the Canada Revenue Agency.

Alternatively, Hydro PILs returns can be filed in person at certain ServiceOntario locations.

Hydro PILs payments

Hydro PILs instalment or balance of tax payments can be made:

Payments should be made payable to the Minister of Finance in Canadian funds. The corporation’s business number should be printed on the back of the cheque or money order.

Hydro PILs credits

Amendments to the Electricity Act, 1998 enhance the application of past payments in lieu of federal and provincial tax against a taxpayer’s transfer tax liability.

Due dates, assessments and refunds

A completed tax return and any supporting documents need to be filed within six months after the end of each tax year.

Corporations that do not file a return on time may receive an assessment that has automatically estimated an amount of tax owing. Estimated amounts will be calculated based on the average of total tax assessed on/up to the past 6 filed tax returns excluding nil and credit tax returns.

After the corporation’s tax return is processed, the ministry will send an assessment by mail. Any refunds will be paid after the assessment is issued.