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21 February 2019

Canada: Nunavut issues budget 2019/20

Executive summary

On 20 February 2019, Nunavut Finance Minister George Hickes tabled the territory’s fiscal 2019/20 budget. The budget contains no new taxes and no tax increases.

The Minister anticipates a deficit of CA$35 million1 for 2018/19 and projects a deficit of $12 million for 2019/20.

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 2019 corporate tax rates are summarized in Table A.

Table A: Nunavut corporate tax rates
 
2019
 
Nunavut
Federal and Nunavut combined

Small-business tax rate*,**

4.0%

13.0%

General corporate tax rate

12.0%

27.0%

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

** The federal small-business rate was reduced from 10.0% 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 2019 Nunavut personal tax rates are summarized in Table B.

Table B: 2019 Nunavut personal tax rates
First bracket rate
Second bracket rate
Third bracket rate
Fourth bracket rate

$0 to $45,414

$45,415 to $90,829

$90,830 to $147,667

Above $147,667

4.00%

7.00%

9.00%

11.50%

For taxable income in excess of $95,259, the 2019 combined federal-Nunavut personal income tax rates are outlined in Table C.

Table C: Combined 2019 federal and Nunavut personal tax rates
Bracket
Ordinary income*
Eligible dividends
Non-eligible dividends

$95,260 to $147,667

35.00%

19.97%

26.87%

$147,668 to $210,371

40.50%

27.56%

33.19%

Above $210,371

44.50%

33.08%

37.79%

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

Other tax measures

Carbon tax

The Minister indicated that the Government is currently developing options on how best to return to taxpayers the revenue that will be generated by the federal backstop carbon pollution pricing system, which Nunavut chose to voluntarily adopt.

The details on this revenue return will be made public before the carbon pricing system takes effect in the territory on 1 July 2019.

Endnote

1. Currency references in this Alert are to CA$.

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
  • Terry McDowell | terry.mcdowell@ey.com
Ernst & Young LLP (Canada), Montréal
  • 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
  • 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
  • Trevor O’Brien | trevor.m.obrien1@ey.com

ATTACHMENT

Document ID: 2019-5263

 
 

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