Provincial Budget Round Up – Some Tax Cuts, But for How Long?

Geoff Currier

It’s provincial budget time and in this Special Report, Knowledge Bureau Report covers the highlights of five of them released since the beginning of February. 

We are expecting the Saskatchewan budget on March 19.

March 4 - British Columbia:  In the shadow of American tariffs, B.C. Finance Minister Brenda Bailey delivered her province's budget for the 2025-26 fiscal year, the third budget delivered by the David Eby government.  Heavy spending and increasing debt are the most prominent features.  There were no income tax increases were announced in the budget but there were some tax changes:

• Tax Brackets and Rates.  The federal tax brackets and personal tax credit amounts are going up 2.8% through indexation.  Note that taxpayers subject to the federal minimum tax are also  subject to a BC Minimum tax of 33.7%.
• Effective January 1, 2025, the BC Family Benefit will harmonize with new federal rules for the Canada Child Benefit:  the BC benefit will continue to be paid for six months following the death of a child
• The training tax credit for individuals will be extended until the end of 2028 and starting on  April 1, 2025, people with a disability and eligible First Nations will continue to an enhanced credit after the federal Apprenticeship Incentive Grant expires on March 31, 2025
• The basic film and television tax credit is being bumped from 35% to 40%
• The basic production services tax credit goes from 28% to 36%.
• In September, the interactive digital media tax credit will increase to 25% for eligible salaries and wages incurred in B.C. (productions on or after September 1, 2025). This will also now become a permanent tax credit.
• The small business venture capital tax credit is going to see a major boost. The annual credit limit that an individual can claim for investments made after tomorrow goers from $120,000 to $300,000
• There’s also an increase to the small business venture capital program budget over the next three years from $8.5 million to $53.5 million.
• For the regional district tax credit – animated productions will now qualify on or after January 1, 2025.
• Zero-Emission Vehicles Exemption.  Anyone looking to buy or sell a used zero emission vehicle may wish to do so prior to May 1st. At that time those vehicles will be subject to provincial sales tax. The exemption on those vehicles was initially to end in 2027.
• Climate action tax credit.  There will be no changes to the credit despite increased carbon taxes in 2025.
• A Newly Increased Speculation and Vacancy Tax Rate will start January 1, 2026.  Canadian citizens and permanent residents who are not untaxed worldwide earners, as well as others, will see the current 0.5 per cent rate increase to 1 per cent. The rate for foreign owners and untaxed worldwide earners, as well as others specified under the Speculation and Vacancy Tax Act will rise from 2 per cent to 3 per cent. 

This tax is levied on property owners based on the use of their residential properties during the 2026 calendar year and onward.  It will not impact taxpayers declaring based on the use of their residential properties in 2025 or before.

In conjunction with the tax rate increases, the non-refundable speculation and vacancy tax credit for residents of BC will increase from $2,000 to $4,000.

Also note:  Registered leaseholders who are not already required to declare in 2024 will declare for the first time in 2025, based on the use of the property in 2024.

• Property Taxes.  First Nations people in B.C. will be receiving a variety of tax breaks, including an exemption from the property transfer tax if the property is already owned by a First Nation. This only applies if the land is owned by a First Nation prior to May of 2024. Property used by First Nations for community or ceremonial purposes, but which have no present use will be exempt from the annual rural property tax. Those same properties will also be exempt from provincial school property taxes. Some tax measures won’t be announced until spring, such as rural property tax rates and school tax rates.

February 27 - Alberta’s Budget:   Alberta Finance Minister Nate Horner delivered his budget on Thursday, Feb. 27. Despite US tariff threats, there are three main headlines in this budget which are a $5.2 billion deficit, $1.2 billion in tax cuts and a revenue drop of $6.6 billion from the previous fiscal year. Lower oil prices and the tax cuts explain much of the anticipated decline in revenues.   Still the deficit, is expected to be reduced to $2.4 billion next year and to $2 billion in 2027.  Here’s how the numbers shake out:

Tax Relief: There is some tax relief on the way for Albertans who earn less than $60,000 a year in the form of a new 8% personal income tax bracket.  Those same Albertans will see their personal income taxes slashed by 20%. This could save individual taxpayers up to $750, beginning with their July 1st paycheques. Those earning more than $60,000 will also reap the benefits of this tax cut. Check out the 2025 marginal tax rates:

2025 Marginal Tax Rates after the Alberta Budget

February 24 - Nunavut Budget Highlights:   There are no personal or corporate tax changes in this budget which calls for increases across the board in tax revenues, which total $180.4 million. Personal income taxes will make up $40.3 million of that figure. Corporate taxes will contribute $22.1 million and payroll taxes another $48.8 million. Tobacco will add $24.3 million to the coffers with fuel taxes adding another $25.2 million. Property taxes, insurance and cannabis taxes make up the balance although cannabis revenues are only expected to be $1.1 million.

Because the federal government has instituted a carbon tax exemption on heating fuel, the carbon rebate in Nunavut will be reduced from $308 to $100.

February 18  Nova Scotia’s Budget:   Nova Scotia budget, titled Unlocking Our Potential, promises $500 million in tax savings for Nova Scotians, including a 1 per cent reduction in the HST beginning on April 1st.  The basic personal exemption is being raised by a significant amount, from $8,744 to $11,744. That measure kicked in on January 1st of this year. This budget also removed the additional $3,000 supplement that was in affect in 2024. January also marked the beginning of the first year of indexing tax brackets.

2025 Marginal Tax Rates after Nova Scotia Budget

There’s support for small business in this budget as well. The small business tax is being reduced from 2.5% to 1.5% on April 1st. The small business tax rate threshold is being bumped up from $500,000 to $700,000.

Minimum wage workers in Nova Scotia will see two increases this year. The first will see an increase to $15.70 on April 1. The second will be a bump-up  to $16.50 on October 1.  

February 6 - Northwest Territories Budget Highlights: Unlike some other jurisdictions the NWT is projecting a budget surplus in 2025-26. There was no mention of any tax increases in her budget speech.The federal carbon tax increase is due in April. The tax rate will hike $15 per tonne to $95 per tonne. This is a tax which will impact all provinces and territories. The NWT says property taxes will rise at the rate of inflation.

The Bottom Line:   As with all Canadian jurisdictions, the uncertainty surrounding a potential change in government in Ottawa and the tariff war with our largest trading partner, may well impact the budgets of all the provinces.   

We will be following all provincial governments as they table their budgets for the 2025-26 fiscal year. Stay tuned weekly to Knowledge Bureau Report for continuing coverage of breaking tax and economic news and tune in to a new podcast- Real Tax News You Can Use with Evelyn Jacks: podcast.knowledgebureaureport.com

Readers may also be interested in:

Canada’s Income Tax Fundamentals Course

RWM Designation Program