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07 March 2022

Canada: Yukon issues budget 2022/23

Executive summary

On 3 March 2022, Yukon Premier and Finance Minister Sandy Silver tabled the territory’s fiscal 2022/23 budget. The budget contains no new taxes and no tax increases.

The Minister anticipates a surplus of CA$25.5 million1 for 2021/22 and projects a surplus of $39.5 million for 2022/23 and surpluses for each of the next two years ($73.5 million for 2023/24 and $63.3 million for 2024/25).

The following is a brief summary of the key tax measures.

Detailed discussion

Business tax measures

Corporate income tax rates

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

Yukon’s 2022 corporate income tax rates are summarized in Table A.

Table A – 2022 corporate income tax rates*

 

2022

Yukon

Federal and
Yukon combined

Small-business tax rate**

0%

9%

General manufacturing and processing tax rate**

2.50%

17.50%

General corporate tax rate**

12%

27%

* Rates represent calendar-year rates.

** The 2021 federal budget proposed to temporarily reduce the federal corporate income tax rate for qualifying zero-emission technology manufacturers by 50% (i.e., to 7.5% for eligible income otherwise subject to the 15% general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% small-business corporate income tax rate), applicable for taxation years beginning after 2021. The reduced tax rates are proposed to be gradually phased out for taxation years beginning in 2029 and fully phased out for taxation years beginning after 2031.

Personal tax

Personal income tax rates

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

The 2022 Yukon personal income tax rates are summarized in Table B.

Table B – 2022 Yukon personal income tax rates

First
bracket rate

Second bracket rate

Third bracket rate

Fourth bracket rate

Fifth
bracket rate

$0 to $50,197

$50,198 to $100,392

$100,393 to $155,625

$155,626 to $500,000

Above $500,000

6.40%

9%

10.90%

12.80%

15%

For taxable income in excess of $155,625, the 2022 combined federal-Yukon personal income tax rates are outlined in Table C.

Table C – Combined 2022 federal and Yukon personal income tax rates

Bracket

Ordinary income*

Eligible dividends

Non-eligible dividends

$155,626 to $221,708**

42.34%

21.11%

37.54%

$221,709 to $500,000

45.80%

25.89%

41.52%

Above $500,000

48%

28.92%

44.05%

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

** The federal and territorial basic personal amounts comprise two elements: the base amount ($12,719 for 2022) and an additional amount ($1,679 for 2022). The additional amount is reduced for individuals with net income in excess of $155,625 and is fully eliminated for individuals with net income in excess of $221,708. Consequently, the additional amount is clawed back on net income in excess of $155,625 until the additional tax credit ($252 federally and $107 in Yukon) is eliminated; this results in additional federal and territorial income tax (e.g., 0.38% and 0.16%, respectively, on ordinary income) on taxable income between $155,626 and $221,708.

_________________________________________

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

Ernst & Young LLP (Canada), Toronto

Ernst & Young LLP (Canada), Quebec and Atlantic Canada

Ernst & Young LLP (Canada), Prairies

Ernst & Young LLP (Canada), Vancouver

_________________________________________

Endnotes

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

Document ID: 2022-5238

 
 

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