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March 27, 2023 Canada: New Brunswick issues budget 2023/24
Executive summary On 21 March 2023, New Brunswick Minister of Finance and Treasury Board Ernie Steeves tabled the province’s fiscal 2023/24 budget. The budget contains no new taxes and no tax increases. The Minister anticipates a surplus of CA$40.3 million1 for 2023/24 and projects surpluses for each of the next two years. 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 the corporate income tax rates or the $500,000 small-business limit. New Brunswick’s 2023 corporate income tax rates are summarized in Table A. Table A – 2023 New Brunswick (NB) 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. These reductions are not reflected in the combined federal and New Brunswick rates above. 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 tax years ending after 7 April 2022 (prorated for tax years straddling this effective date). Personal tax Personal income tax rates The budget does not include any changes to personal income tax rates other than the previously announced rate reductions last fall, which were effective for the 2023 and subsequent taxation years. The 2023 New Brunswick personal income tax rates are summarized in Table B. Table B – 2023 New Brunswick personal income tax rates
For taxable income exceeding $165,430, the 2023 combined federal–New Brunswick personal income tax rates are outlined in Table C. Table C – Combined 2023 federal and New Brunswick personal income tax rates
1 The capital gains rate is one-half the ordinary income tax rate. 2 The federal basic personal amount comprises 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 exceeding $165,430 and is fully eliminated for individuals with net income exceeding $235,675. Consequently, the additional amount is clawed back on net income exceeding $165,430 until the additional tax credit of $222 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between $165,431 and $235,675. Other tax measures Property tax Legislation introduced in November 2022 accelerated previously announced measures from the 2022–23 budget regarding provincial property tax rate reductions. These proposed property tax rate reductions, which were intended to be phased in over the next two taxation years, will be fully implemented for the 2023 taxation year. Carbon taxation As previously announced, the Government of New Brunswick has opted to adopt the federal carbon backstop for carbon taxation. Until recently, the province had applied a made-in-New Brunswick approach to carbon taxation. _________________________________________ For additional information with respect to this Alert, please contact the following: Ernst & Young LLP (Canada), Dieppe
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