Maritime Provinces Raise Taxes in Recent Budgets

Over the last couple of weeks, the provincial governments in the Atlantic provinces brought down their 2013 provincial budgets.

Newfoundland and Labrador

On March 23, the 2013 provincial budget for Newfoundland and Labrador was delivered. This budget contained no personal or corporate tax changes.

Prince Edward Island

On March 27, the 2013 Prince Edward Island provincial budget was delivered. Timed to correspond to the introduction of the HST and elimination of the PST on April 1, the small business tax rate increases from 1% to 4.5%. In keeping with this rate change, the provincial dividend tax credit for other than eligible dividends will be adjusted (details not provided). 

The budget also introduced a new refundable tax credit for low-income taxpayers. The credit appears to be an adjunct to the GST Credit and payments will begin in July 2013.

New Brunswick

On March 28, the province of New Brunswick introduced a personal tax rate increase across the board; increases range from 6% for the lowest tax bracket to more than 24% for the highest tax bracket. The increase is effective July 1, 2013, so the rate applicable to 2013 will be an average of the rate applicable before the increase and the rate applicable after. The following table shows the effect of the rate change:

At the same time, New Brunswick’s corporate tax rate will increase from 10% to 12%. 

Nova Scotia

On April 4, the 2013 provincial budget for Nova Scotia was delivered. As of January 1, 2014, the small business tax rate will decrease from 3.5% to 3%. At the same time, the small business limit will be reduced from $400,000 to $350,000 meaning fewer small businesses will be eligible for the reduced rate.

The budget also promised a new age amount credit for seniors with income below $24,000 to reduce or eliminate their provincial taxes payable.