Executive summary

On 28 May 2018, Nunavut Finance Minister David Akeeagok tabled the territory's fiscal 2018-19 budget. The budget contains no new taxes and no tax increases.

The Minister anticipates a fiscal deficit of CA$39 million¹ for 2017-18, and projects a fiscal deficit for $28 million for 2018-19.

Following is a brief summary of the key tax measures.

Detailed discussion

Business tax measures

Corporate tax rates

No changes are proposed to the corporate tax rates or the $500,000 small-business limit.

Nunavut's 2018 and 2019 corporate tax rates are summarized in Table A.

Table A: Corporate tax rates

*The small-business rate is prorated based on a 31 December year end.

**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.

Personal tax

Personal income tax rates

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

The 2018 Nunavut personal tax rates are summarized in Table B.

Table B: Nunavut personal tax rates

For taxable income in excess of $93,208, the 2018 combined federal-Nunavut personal income tax rates are outlined in Table C.

Table C: Combined 2018 federal and Nunavut personal tax rates

*The rate on capital gains is one-half the ordinary income tax rate.

Fuel tax

The Minister announced the end of the fuel tax rebate for mining exploration. The rebate will be replaced by a program administered by the Department of Economic Development and Transportation to assist companies involved in mining exploration to engage more effectively with communities. The department will receive $3.3 million over three years.

Other tax measures

Carbon tax

The Minister announced that Nunavut does not intend to administer a territorial carbon tax. The federal backstop carbon pricing system will therefore be applicable in Nunavut.

Endnote

¹ Currency references in this Alert are to CA$.

———————————————
CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (Canada), Toronto

• Linda Tang
  linda.y.tang@ca.ey.com
• Mark Kaplan
  mark.kaplan@ca.ey.com
• Phil Halvorson
  phil.d.halvorson@ca.ey.com
• Trevor O'Brien
  trevor.obrien@ca.ey.com

Ernst & Young LLP (Canada), Montreal

• Albert Anelli
  albert.anelli@ca.ey.com
• Angelo Nikolakakis
  angelo.nikolakakis@ca.ey.com
• Nicolas Legault
  nicolas.legault@ca.ey.com
• Nik Diksic
  nik.diksic@ca.ey.com

Ernst & Young LLP (Canada), Calgary

• Karen Nixon
  karen.r.nixon@ca.ey.com
• Mark Coleman
  mark.coleman@ca.ey.com

Ernst & Young LLP (Canada), Vancouver

• Eric Bretsen
  eric.r.bretsen@ca.ey.com

Ernst & Young LLP, Canadian Tax Desk, New York

• Terry McDowell
  terry.mcdowell@ey.com
• Andrea Lepitzki
  andrea.lepitzki@ey.com

———————————————
ATTACHMENT

PDF version of this Tax Alert