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Last updated: Oct. 8, 2021
Last week New Brunswick Finance Minister Ernie Steeves presented the province’s fiscal 2021–22 budget.
We’re not seeing any surprises in this budget. Like other provinces, the New Brunswick government is increasing spending on COVID-19 measures.
Steeves predicts a projected deficit of $244.8 million for 2021-2022 to “to address the pressures that the pandemic will continue to place upon the province.”
The government announced several additional priorities including incentivizing travel within the province, supporting long-distance learning, and increasing the carbon tax to fall in line with the federal backstop. That means by April 1st the tax will go up 2.21 cents per litre for gasoline and 2.68 cents per litre for diesel. Unfortunately, no new targeted programs have been announced that support small business recovery.
On the bright side, there’s no increases for personal income tax rates or corporate tax rates.
Personal income tax rates in New Brunswick
As mentioned above, there are no new taxes or tax increases for individuals. The combined federal/personal income tax rates are outlined below.
| Personal Combined Federal/Provincial Top Marginal Rates | ||
| 2020 | 2021 | |
| Interest and regular income | 53.30% | 53.30% |
| Capital gains | 26.65% | 26.65% |
| Eligible dividends | 33.51% | 33.51% |
| Non-eligible dividends | 47.75% | 47.75% |
| Combined Federal & New Brunswick 2021 Personal Tax Rates | |||
| Bracket | Ordinary Income | Eligible Dividends | Non-Eligible Dividends |
| $98,040 to $142,534 | 42.52% | 18.63% | 35.35% |
| $142,534 to $151,978 | 43.84% | 20.45% | 36.87% |
| $151,978 to $162,383 | 47.16% | 25.03% | 40.69% |
| $162,383 to $216,511 | 49.62% | 28.43% | 43.52% |
| Above $216,511 | 53.30% | 33.51% | 47.75% |
Note: An additional federal basic personal amount may be available for individuals with taxable income below $216,511. The additional tax credit is $140 for individuals with taxable income below $151,978; this additional amount is gradually phased out for individuals with taxable income between $151,978 and $216,511, resulting in an additional 0.22% to 0.30% of federal income tax on taxable income in this bracket.
| Provincial Personal Tax Rates | ||||
| 1st Bracket | 2nd Bracket | 3rd Bracket | 4th Bracket | 5th Bracket |
| $0 to $43,835 | $43,835 to $87,671 | $87,671 to $142,534 | $142,534 to $162,383 | Over $162,383 |
| 9.68% | 14.82% | 16.52% | 17.84% | 20.30% |
New Brunswick Non-Refundable Tax Credits
The province announced personal tax credits for 2020 will be indexed by 1.010%. The maximum tax credit amounts and actual New Brunswick tax credits for 2020 and 2021 are set out below.
| New Brunswick Non-Refundable Tax Credits | ||||
| 2020 | 2021 | |||
|
Maximum Amount |
New Brunswick
Tax Credit |
Maximum Amount |
New Brunswick
Tax Credit |
|
| Basic Personal Amount | 10,459 | 1,012 | 10,564 | 1,023 |
| Spousal Amount | 8,882 | 860 | 8,970 | 868 |
| Eligible dependent amount | 8,882 | 860 | 8,970 | 868 |
| Age amount | 5,107 | 494 | 5,158 | 499 |
| Infirm dependent amount | 4,940 | 478 | 4,990 | 483 |
| CPP Contributions | 2,898 | 281 | 3,166 | 307 |
| EI Contributions | 856 | 83 | 890 | 86 |
| Pension income amount | 1,000 | 97 | 1,000 | 97 |
| Disability amount | 8,468 | 820 | 8,552 | 828 |
| Disability supplement | 4,940 | 478 | 4,989 | 483 |
| 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 | 4,940 | 478 | 4,989 | 483 |
| 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 Rates
No changes are proposed to the corporate tax rates or to the $500,000 small business limit.
| Corporate Income Tax Rates | |||||
| New Brunswick | Combined Federal & New Brunswick | ||||
| 2020 | 2021 | 2020 | 2021 | ||
| General | 14% | 14% | 29% | 29% | |
| Small business1 | 2.5% | 2.5% | 11.5% | 11.5% | |
1 The small business rate is prorated based on a December 31st year end.
New Brunswick Budget Highlights 2021
Energized Private Sector
- A $20 million multi-year strategy investment to support the development of the small modular nuclear reactors sector.
- $3 million to address gaps in the broadband network and to continue the evolution of information security systems.
- $3.3 million invested through the Healthy Forests Partnership to proactively protect forests from the impact of the spruce budworm to keep New Brunswick’s forest sector sustainable and healthy for many years to come.
- A continuation of the travel incentive program in the 2021-22 fiscal-year.
- A multi-year strategic investment to establish New Brunswick’s physical presence in India and the United Kingdom to promote the province as an ideal location to invest, live, and study.
World-class education
- $1.7 million to support the development and delivery of distance learning opportunities.
- $1.2 million to maintain the additional technicians put in place to provide technical support to teachers and students.
- $1 million to continue support of the Laptop Subsidy Program, helping an estimated 2,000 students access technology for the upcoming year.
- A wage increase of 75 cents per hour for qualified early childhood educators.
Vibrant and sustainable communities
- $10.8 million to increase the availability of affordable housing units throughout the province in conjunction with the new National Housing Strategy and the Canada Housing Benefit.
- $2.3 million to support the RCMP crime reduction unit with the goal of reducing the illegal drug supply in the province and to support the objectives outlined in the Inter-Departmental Addiction and Mental Health Action Plan: Priority Areas for 2021-2025.
- $2 million to create a Safer Communities Program to complement the crime reduction unit.
- Additional support to women, with or without children, who have left an abusive relationship.
Environment
- The province will increase its carbon-emitting products tax from $30 per tonne to $40 per tonne effective April 1, as per requirements of the federal backstop. This will result in a carbon tax increase of 2.21 cents per litre for gasoline and 2.68 cents per litre for diesel, with the tax revenue directed back to New Brunswickers.
- $36 million transferred to the Climate Change Fund.
Contact FBC
If you’d like to learn more about how FBC can support your business, call us at 1-800-265-1002 or email fbc@fbc.ca. Unlimited consultation related to tax matters is a key benefit of FBC Membership. You can also book an appointment online.
