New Brunswick Budget Report 2019

Last updated: Mar. 19, 2019 

“A Budget that works for all New Brunswickers”

 On March 19, 2019, New Brunswick Finance Minister Cathy Rogers delivered the province’s 2019 budget.

The budget focused on three key priorities:

• Investments in seniors;
• Youth employment; and
• Economic competitiveness.

The 2018-2019 budget projects government revenues to increase by 1.77%, while expenses are expected to grow by 2.54%.

The deficit for the year is projected to be $188.7 million. The deficit is expected to be eliminated in its entirety by 2021-2022.

Real gross domestic product growth is projected to be 1.1% in 2018; this represents the fourth consecutive year of growth in the New Brunswick economy.

Employment is expected to grow in 2018 for the second straight year. Government infrastructure spending is expected to encourage economic activity in the province in the medium-term.

Provincial exports are anticipated to grow in 2018 as the US economy continues to strengthen and major primary sectors boost production.

Interest rates are projected to increase in 2018, limiting the growth of household consumption.

The legalization of cannabis is identified as an economic opportunity, and the province intends to enter into an agreement with the federal government for the collection and sharing of cannabis duties.

It should also be noted that the government announced the removal of the front license plate on vehicles.

Personal Tax Measures

Personal income tax rates – No changes were announced!

The budget does not include any new taxes or tax rate changes for individuals.

As a result, New Brunswick’s personal income tax rates effective January 1, 2018 are as follows:

Personal Combined Federal/Provincial Top Marginal Rates
	2018	2019
Interest and regular income	53.30%	53.30%
Capital gains	26.65%	26.65%
Eligible dividends	33.51%	33.51%
Non-eligible dividends	46.88%	47.75%

Provincial Personal Tax Rates

1st Bracket	$0 to $42,592	9.68%
2nd Bracket	$42,592 to $85,184	14.82%
3rd Bracket	$85,184 to $138,491	16.52%
4th Bracket	$138,491 to $157,778	17.84%
5th Bracket	Over $154,383	20.30%

Sustainable Education System

Some budget announcements include:

• New Brunswick Early Learning Centres initiative will continue.
• An additional $1 million will be invested to increase wages for trained early childhood educators.
• A red-tape reduction commission will be established to identify and eliminate regulations that distract teachers from classroom teaching.
• The government will unveil a renewed bursary program for students attending both publicly-funded and private sector universities and colleges in New Brunswick.

New Brunswick Tuition Tax Credit

The budget proposed to re-introduce the New Brunswick tuition tax credit for taxation years beginning in 2020

Sustainable Health Care System

Some budget announcements include:

• An investment of $2.4 million will be made in 2019–20 to implement a new nursing human resource strategy, which will include new full-time positions, more internationally educated nurses, stronger education programs and measures to improve retention.
• A new primary health care demonstration pilot project, staffed primarily by nurse practitioners, will be launched to help more people access high-quality health care with the capacity for 6,000 patients once fully operational.
• The budget includes investments in process improvements to reduce wait times, with an initial focus on hip and knee replacement surgeries.
• The government will seek a one-time demographic-weighted health-care agreement with the federal government to allow New Brunswick to address health-care pressures caused by an aging population.

New Brunswick Non-Refundable Tax Credits

The government confirmed today that personal tax credits for 2018 will be indexed by 1.022%.

The maximum tax credits amounts and actual New Brunswick tax credits for 2018 and 2019 are set out below.

New Brunswick Non-Refundable Tax Credits
	2018		2019
	Maximum Amount	New Brunswick Tax Credit	Maximum Amount	New Brunswick Tax Credit
Basic Personal Amount	10,043	972	10,264	994
Spousal Amount	8,528	826	8,716	844
Eligible dependent amount	8,528	826	8,716	844
Age amount	4,904	475	5,012	485
Infirm dependent amount	4,743	459	4,848	469
CPP Contributions	2,594	251	2,749	266
EI Contributions	858	83	860	83
Pension income amount	1,000	97	1,000	97
Disability amount	8,131	787	8,310	804
Disability supplement	4,743	459	4,847	469
Tuition and education amounts	Variable	Variable	Variable	Variable
Adoption expenses	0	N/A	0	N/A
Medical expenses	Variable	Variable	Variable	Variable
Medical expenses (other dependents)	N/A	N/A	N/A	N/A
Caregiver amount	4,743	459	4,848	469
Interest on student loans	Variable	Variable	Variable	Variable
Donations & Gifts -first $200 – over $200	200 75% of income	20 Variable	200 75% of income	20 Variable
In general, credits are multiplied by 9.68% to arrive at the deduction from New Brunswick Tax.  In the case of donations and gifts over $200, the credit is 17.95%

Corporate Tax Measures

Corporate Tax Rates

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

New Brunswick’s corporate income tax rates effective January 1, 2019 are as follows:

Corporate Income Tax Rates – As of January 1, 2019
	New Brunswick		Combined Federal & New Brunswick
	2018	2019	2018	2019
General	14%	14%	29%	29%
Small business1 2 3	2.625%	2.5%	11.625%	11.50%

Notes:

1. The small business rate is prorated based on a December 31 year end.
2. On 24 October 2017, the federal government tabled a notice of ways and means motion to implement reductions in the small-business corporate income tax rate, which were announced on 16 October 2017. The federal small business rate is reduced from 10.5% to 10.0% effective 1 January 2018 and will be further reduced to 9.0% effective 1 January 2019.
3. The New Brunswick small-business rate was reduced from 3.5% to 3.0 % effective 1 April 2017. On 14 November 2017, the province announced its intention to further reduce the small-business rate to 2.5% effective 1 April 2018. This proposal was enacted 20 December 2017.

Small Business Income Tax Rate

As announced in November 2017, effective April 1, 2018, the small business income tax rate will be lowered from 3.0% to 2.5%, reaching the overall goal that was set out in last year’s budget.

Export-Oriented Small Businesses

The budget also includes support to enhance the productivity of export-oriented small businesses; however, the details for the initiative were not disclosed.

(Source: New Brunswick Government)