Nova Scotia Budget Report 2018 | FBC, Canada's Farm & Small Business Tax Specialist

Nova Scotia Budget Report 2018

Nova Scotia Budget Report 2018

Nova Scotia Budget Report 2018

“Stronger Services and Supports”

On 20 March 2018, Nova Scotia Finance and Treasury Board Minister Karen Casey tabled the province’s fiscal 2018–19 budget.  

The budget contains a few tax measures affecting individuals and corporations.

Highlights

  • Surplus of $21.3 million projected for 2017-18
  • Surplus of $29.4 million forecast for 2018-19 fiscal year
  • No income tax or HST rate increases
  • Cannabis tax introduced

The minister anticipates a surplus of $29.4 million for 2018-19, and projects surpluses for each of the next 3 years.

Budget 2018–19 focused on strengthening important services and supports so all Nova Scotians have opportunities to grow and succeed.

The government continued to invest in and make progress on plans to improve healthcare and education (including early years), to create safer, more connected communities, and to strengthen the economy and connect more people to it.  

The investments built on their strengths, opened more doors for those who have faced barriers, and drive innovation.

No new tax changes were announced in the budget.

Personal Tax Measures

Personal Income Tax Rates

The budget does not include any changes to personal income tax rates. 

As a result, Nova Scotia’s personal income tax rates effective January 1, 2018 remain as follows:

2017/2018 Nova Scotia Personal Tax Rates

Bracket

2017 Rates

 

2018 Rates

$0 - $29,590

8.79%

 

8.79%

$25,591 to $59,180

14.95%

 

14.95%

$51,181 to $93,000

16.67%

 

16.67%

$93,001 to $150,000

17.50%

 

17.50%

Above $150,000

21.00%

 

21.00%


For taxable income in excess of $144,489, the 2018 combined federal-Nova Scotia personal

income tax rates are as follows:

 

Personal Combined Federal/Provincial Marginal Rates

 2018

$144,490 to $150,000

$150,001 to
$205,842

Above
$205,842

Interest and regular income

46.50%

50.00%

54.00%

Capital gains

23.25%

25.00%

27.00%

Eligible dividends

31.23%

36.06%

41.58%

Non-eligible dividends

38.63%

41.58%

47.33%

Personal Tax Credits

This budget proposes changes to the following personal credits/amounts:

Medical Expenses

The province is removing the $10,000 maximum on eligible medical expenses that can be claimed through the Medical Expense Tax Credit for a financially dependent relative effective for the 2018 tax year.

Innovation Equity Tax Credit

Effective 1 January 2019, the province intends to introduce a new Innovation Equity Tax Credit, which will be more narrowly focused and will phase out the existing equity tax credit.

Other Personal Tax Measures

Basic Personal Amount, Spousal Amount and Eligible Dependent Amount

As announced in the 2017-18 budget, effective 1 January 2018, the basic personal amount, spousal amount and eligible dependant amount increased $3,000, from $8,481 to $11,481, for individuals with taxable income under $25,000.

The benefit decreases as income increases over $25,000 and ends when taxable income reaches $75,000.

Age Amount

Also as announced in the 2017-18 budget, effective 1 January 2018, the age amount increased $1,465, from $4,141 to $5,606, for individuals with taxable income under $25,000.

The benefit decreases as income increases over $25,000 and ends when taxable income reaches $75,000.

Nova Scotia Non-Refundable Tax Credits

The government confirmed today that personal tax credits for 2017 will be indexed by 1.0%.  

The maximum tax credits amounts and actual Nova Scotia tax credits for 2017 and 2018 are set out below.

Nova Scotia Non-Refundable Tax Credits

 

2017

2018

Maximum Amount

Nova Scotia
Tax Credit

Maximum Amount

Nova Scotia
Tax Credit

Basic Personal Amount

$8,481

$745

$8,481

$745

Spousal Amount

8,481

745

8,481

745

Eligible dependent amount

8,481

745

8,481

745

Age amount

4,141

364

4,141

364

Infirm dependent amount

2,798

246

2,798

246

CPP Contributions

2,564

225

2,594

228

EI Contributions

836

73

858

75

Pension income amount

1,173

103

1,173

103

Disability amount

7,341

645

7,341

645

Disability supplement

3,349

294

3,349

294

Tuition and education amounts

Variable

Variable

Variable

Variable

Adoption expenses

0

0

0

0

Medical expenses

Variable

Variable

Variable

Variable

Medical expenses (other dependents)

N/A

N/A

N/A

N/A

Caregiver amount

4,898

431

4,898

431

Interest on student loans

Variable

Variable

Variable

Variable

Donations & Gifts
-first $200
- over $200


200
75% of income


20
Variable


200
75% of income


20
Variable

In general, credits are multiplied by 8.79% to arrive at the deduction from Nova Scotia Tax.  In the case of donations and gifts over $200, the credit is 21%

Corporate Tax Measures

Corporate Income Tax Rates

The budget confirmed there was no proposed changes to corporate tax.  

As a result, Nova Scotia’s corporate income tax rates effective January 1, 2018 remain as follows:

Corporate Income Tax Rates — As of January 1, 2018

 

Nova Scotia

Combined Federal and Nova Scotia

General

16%

31%

Small business*

3.0%

13%

* on first $500,000 of active business income

* On 24 October 2017, the federal government tabled a notice of ways and means motion to implement reductions in the small-business corporate income tax rate, which were announced on 16 October 2017. The federal small-business rate is reduced from 10.5% to 10.0% effective 1 January 2018 and will be further reduced to 9.0% effective 1 January 2019.

 

Corporate Income Tax Rates — As of January 1, 2019

 

Nova Scotia

Combined Federal
and Nova Scotia

General

16%

31%

Small business*

3.0%

12%

* on first $500,000 of active business income

* On 24 October 2017, the federal government tabled a notice of ways and means motion to implement reductions in the small-business corporate income tax rate, which were announced on 16 October 2017. The federal small-business rate is reduced from 10.5% to 10.0% effective 1 January 2018 and will be further reduced to 9.0% effective 1 January 2019.

Business Tax Measures

The minister did not propose any changes to other business tax measures.

Harmonized Sales Tax

The budget does not include any changes to the harmonized sales tax rate of 15%.

Other Measures

(Not related to tax)

Cannabis Tax

In December 2017, the province agreed in principle to enter into a coordinated cannabis tax framework with the federal government for a two-year period following the legalization of recreational cannabis.

A federal excise duty of $1 per gram of flowering material in a cannabis product will be imposed, of which $0.75 per gram will be collected on behalf of the province.

(Source: Nova Scotia Government)

 

"It is time for us to stand and cheer for the doer, the achiever, the one who recognizes the challenge and does something about it." — Vince Lombardi