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June 27, 2019
Canada: Prince Edward Island issues budget 2019/20
On 25 June 2019, Prince Edward Island Finance Minister Darlene Compton tabled the province’s fiscal 2019/20 budget. The budget contains tax measures affecting individuals and corporations.
The Minister anticipates a surplus of CA$13.8m1 for 2018/19 (up from $1.5m projected in Budget 2018/19) and projects a surplus of $1.8m for 2019/20 and surpluses for the 2020/21 and 2021/22 fiscal years.
The following is a brief summary of the key tax measures.
Business tax measures
Corporate tax rates
No changes are proposed to the general corporate tax rate. However, the Minister announced a reduction in the small-business rate to 3.00% from 3.50%, effective 1 January 2020. The $500,000 small-business limit remains unchanged.
Prince Edward Island’s current and proposed future corporate income tax rates are summarized in Table A.
Table A: Current and proposed corporate tax rates
* The small-business rate is based on a 31 December year-end.
** The federal small-business rate was reduced from 10.00% to 9.00% effective 1 January 2019. The PEI small-business rate was reduced from 4.00% to 3.50% effective 1 January 2019.
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2019 Prince Edward Island personal tax rates are summarized in Table B.
Table B: 2019 Prince Edward Island personal tax rates
In addition, there is a 10% surtax on provincial income tax in excess of $12,500.
For taxable income in excess of $98,995, the 2019 combined federal and Prince Edward Island personal income tax rates are outlined in Table C.
Table C: Combined 2019 federal and Prince Edward Island personal tax rates
* The rate on capital gains is one-half the ordinary income tax rate.
Personal tax credits
This budget proposes changes to the following personal credits/amounts:
1. Currency references in this Alert are to CA$.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), Dieppe, New Brunswick
Ernst & Young LLP (Canada), Halifax, Nova Scotia
Ernst & Young LLP (Canada), St. John’s, Newfoundland