February 26, 2020
Canada: Nova Scotia issues budget 2020–21
On 25 February 2020, Nova Scotia Minister of Finance and Treasury Board Karen Casey tabled the province’s fiscal 2020–21 budget. The budget contains several tax measures affecting individuals and corporations.
The Minister anticipates a surplus of CA$55 million1 for 2020-21 and projects surpluses for each of the next three years.
The following is a brief summary of the key tax measures.
Business tax measures
Corporate tax rates
As announced by the Premier of Nova Scotia on 12 February 2020, effective 1 April 2020, the general corporate tax rate will decrease to 14% from 16%. The small business rate will be reduced from 3% to 2.50%, also effective 1 April 2020. No changes are proposed to the $500,000 small-business limit.
Nova Scotia’s current and proposed future corporate income tax rates are summarized in Table A.
Table A – 2020 Nova Scotia (NS) corporate tax rates
* The small-business and general corporate tax rates are based on a 31 December year-end.
Other business tax measures
The Minister also proposed the following business tax measures:
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2020 Nova Scotia personal tax rates are summarized in Table B.
Table B – 2020 Nova Scotia personal tax rates
For taxable income in excess of $150,473, the 2020 combined federal-Nova Scotia personal income tax rates are outlined in Table C.
Table C – Combined 2020 federal and Nova Scotia personal tax rates
* The rate on capital gains is one-half the ordinary income tax rate.
** An additional federal basic personal amount may be available for individuals with taxable income below $214,368. The additional tax credit is $140 for individuals with taxable income below $150,474; this additional amount is gradually phased out for individuals with taxable income between $150,474 and $214,368, resulting in an additional 0.22% to 0.30% of federal income tax on taxable income in this bracket.
Other tax measures
Vaping product tax
Tobacco product tax
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), Halifax