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March 13, 2023
Canada: Yukon issues budget 2023/24
On 2 March 2023, Yukon Finance Minister Sandy Silver tabled the territory’s fiscal 2023/24 budget. The budget contains no new taxes and no income tax increases.
The Minister anticipates a surplus of CA$43.9 million1 for 2022/23 and projects a surplus of $48.2 million for 2023/24 and surpluses for each of the next two years ($58.8 million for 2024/25 and $45.1 million for 2025/26).
The following is a brief summary of the key tax measures.
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 2023 corporate income tax rates are summarized in Table A.
Table A – 2023 corporate income tax rates1
1 The rates represent calendar-year-end rates unless otherwise indicated.
2 The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate.
3 An additional tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a $100 million exemption to be shared by group members), effective for taxation years ending after 7 April 2022 (prorated for taxation years straddling this effective date).
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2023 Yukon personal income tax rates are summarized in Table B.
Table B – 2023 Yukon personal income tax rates
For taxable income in excess of $165,430, the 2023 combined federal-Yukon personal income tax rates are outlined in Table C.
Table C – Combined 2023 federal and Yukon personal income tax rates
1 The rate on capital gains is one-half the ordinary income tax rate.
2 The federal and territorial basic personal amounts comprise two elements: the base amount ($13,521 for 2023) and an additional amount ($1,479 for 2023). The additional amount is reduced for individuals with net income in excess of $165,430 and is fully eliminated for individuals with net income in excess of $235,675. Consequently, the additional amount is clawed back on net income in excess of $165,430 until the additional tax credit ($222 federally and $95 in Yukon) is eliminated; this results in additional federal and territorial income tax (e.g., 0.32% and 0.13%, respectively, on ordinary income) on taxable income between $165,431 and $235,675.
Other tax measures
In keeping with the existing indexation link with changes to the Consumer Price Index in the Tobacco Tax Act, the tobacco tax rates have increased from 31 cents to 32 cents per cigarette and from 31 cents to 32 cents per gram of tobacco (other than cigarettes and cigars), as of 1 January 2023.
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