Nova Scotia Post Election Budget 2017 | FBC, Canada's Farm & Small Business Tax Specialist

Nova Scotia Post Election Budget 2017

Nova Scotia Post Election Budget 2017

On September 26, 2017, the Honourable Karen Casey presented her first budget as Nova Scotia's Finance and Treasury Board Minister.  

This budget is a re-introduction of the budget that was shelved by the Liberal government when Premier Stephen McNeil called an election. The election was held on May 30, 2017.

Highlights

  • Surplus of $41 million projected for 2016-17
  • Surplus of $136 million forecast for 2017-18 fiscal year (net surplus of $26 million)
  • Small business limit increased to $500,000
  • Basic personal amounts increased for low and middle income taxpayers
  • No income tax or HST rate increases

After several years of deficits, a surplus of $41 million is reported for 2016-17, which is higher than the previously estimated net surplus of $17 million.

A total surplus of $127 million was estimated for 2016-17, but that amount included a one-time revenue amount of $110 million made up of federal and municipal contributions for the convention centre in Halifax.

Due to the changing timeframe for completion of the convention centre, the government moved this one-time funding amount to the 2017-18 fiscal year.

The forecast surplus for 2017-18 is $136 million, for a net surplus of $26 million.

This budget allocated significant spending towards infrastructure development including $390 million over 7 years to make major improvements to certain highways.

Infrastructure spending also includes improving high-speed internet throughout rural Nova Scotia. 

Increased healthcare spending will provide improved access to health care, including greater to orthopedic surgeons and mental health programs. 

Assistance will also be provided to aging Nova Scotians. One way this will be accomplished is by increased access to home care. 

Education spending increases focus on early learning programs as well as incentives to help new post-secondary graduates find work and to provide tuition support to technical apprentices. 

As no new tax changes were announced, below is our full budget report from April.

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, 2017 remain as follows:

2017 Nova Scotia Personal Tax Rates

Bracket

Pre-budget

2017 Proposed 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 $142,353, the 2017 combined federal-Nova Scotia personal

income tax rates are as follows:

Personal Combined Federal/Provincial Marginal Rates

2017

$142,354 to $150,000

$150,001 to $202,800

Above $202,800

 

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

38.19%

42.29%

46.97%

 

Personal Tax Credits

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

Effective 1 January 2018, the basic personal amount, spousal amount and eligible dependent amount will increase $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 will end when taxable income reaches $75,000.

Effective 1 January 2018, the age amount will increase by $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 will end 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 2016 and 2017 are set out below.

Nova Scotia Non-Refundable Tax Credits

 

2016

2017

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

2,480

218

2,564

225

EI Contributions

931

82

836

73

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, 2017 remain as follows:

Corporate Income Tax Rates — As of January 1, 2017

 

Nova Scotia

Combined Federal and Nova Scotia

General

16%

31%

M&P

16%

31%

Small business*

3.0%

13.5%

* on first $500,000 of active business income

Small Business Threshold Increased

On March 28, 2017, the provincial government announced that it would increase the small business threshold from $350,000 to $500,000. 

The budget confirmed this increase, and announced that it would be effective January 1, 2017.    

No additional changes were announced to the small business tax rate, which will remain at 3% for 2017. 

The combined federal and provincial small business tax rate for Nova Scotia for 2017 will also remain unchanged at 13.5%.

Harmonized Sales Tax

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

Other Measures (Not Related to Tax)

Motive Fuel Tax Exemption for Mining and Quarrying Announced

Currently, motive fuel exemptions are available for such purposes as fishing, farming and logging operations; commercial vessels and ferries; provincial, municipal, school board and public works vehicles; equipment used for firefighting; motive fuel purchased by status Indians on a reserve; and locomotives. 

The budget proposes to extend these fuel rebates by providing an exemption from motive fuel tax for equipment used in the mining and quarry sector. 

This measure will be effective April 1, 2017.

How Nova Scotia Compares

The following chart compares top personal and corporate tax rates and sales taxes for all provinces and territories, as announced to September 26, 2017.

 

 

2017 Corporate Tax Rates

 

 

Top 2017 Personal Rates

General
%

M&P
%

Small Business
%

2017 Prov. Sales Tax

B.C.

47.70

26.00

26.00

12.50(2)

7.00

Alta.

48.00

27.00

27.00

12.50

-

Sask.

47.75

27.00(1)

25.00(1)

12.50

6.00(7)

Man.

50.40

27.00

27.00

10.50

8.00

Ont.

53.53

26.50

25.00

15.00

8.00(8)

Qué.

53.31

26.80

26.80

18.50(3) 

9.975(9)

N.B.

53.30

29.00 

29.00

13.50(4)

10.00(8)

N.S.

54.00

31.00

31.00

13.50

10.00(8)

P.E.I.

51.37

31.00

31.00

15.00

10.00(8)

N.L.

51.30

30.00

30.00

13.50

10.00(8)

Yukon(5)

48.00

30.00

17.50

13.50(6)

-

N.W.T.

47.05

26.50

26.50

14.50

-

Nunavut

44.50

27.00

27.00

14.50

-

  1. The general business rate will decrease to 26.5% and the M&P tax rate will decrease to 24.5% effective July 1, 2017.
  2. The small business tax rate will decrease to 13% effective April 1, 2017.
  3. Quebec provides a rate reduction from the small business rate eligible manufacturing small and medium-size enterprises (SMEs).Where certain conditions are met, the maximum reduction available is 4%, for a combined rate 14.5%.Note that a lesser reduction from the small business rate may be available to certain manufacturing SMEs where some, but not all conditions are met.
  4. The small business tax rate will decrease to 14% effective April 1, 2017.
  5. Rates do not reflect changes in tax rates announced April 27, 2017.
  6. The tax rate for M&P profits eligible for the small business deduction is 12%.
  7. The PST increased from 5% effective March 23, 2017.
  8. As part of the HST (combined rates are 15% in New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland & Labrador and 13% in Ontario).
  9. The QST system is harmonized with the GST, though two separate tax systems remain – the GST and the amended QST.The combined rate is 14.975%.

(Source: Nova Scotia Government)

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