Nova Scotia Budget Report 2019

Nova Scotia Budget Report 2019

Nova Scotia Budget Report 2019

 “Building on a Strong Foundation”

On 26 March 2019, Nova Scotia Finance and Treasury Board Minister Karen Casey tabled the province’s fiscal 2019–20 budget.  

The budget contains several tax measures affecting individuals and corporations. The budget contains no new taxes and no tax increases.

The minister anticipates a surplus of $33.6 million for 2019–20 and projects surpluses for each of the next four years.

The budget focused on 4 key priorities:

  1. Improving Access to Healthcare
  2. Investing in Education and preparing Youth for the Workforce
  3. Creating the Conditions for Economic Growth; and
  4. Supporting People and Communities.

The government continued to invest in healthcare, education, infrastructure, communities, and the economy.

As no new tax changes were announced in the budget.

Highlights

  • Surplus of $36.6 million projected for 2019-20
  • Surplus of $51.9M, $65.8M, $73.4M in the next three years
  • No income tax or HST rate increases

Personal Tax Measures

Personal Income Tax Rates

The budget does not include any changes to personal income tax rates.  As a result, Nova Scotia’s personal income tax rates effective January 1, 2019 remain as follows:

2018/2019 Nova Scotia Personal Tax Rates

Bracket

2018 Rates

2019 Rates

$0 - $29,590

8.79%

8.79%

$25,591 to $59,180

14.95%

14.95%

$51,181 to $93,000

16.67%

16.67%

$93,001 to $150,000

17.50%

17.50%

Above $150,000

21.00%

21.00%

For taxable income in excess of $150,000, the 2019 combined federal-Nova Scotia personal income tax rates are as follows:

ersonal Combined Federal/Provincial Marginal Rates

 2018

$147,667 to $150,000

$150,001 to $210,371

Above $210,371

Interest and regular income

46.50%

50.00%

54.00%

Capital gains

23.25%

25.00%

27.00%

Eligible dividends

31.23%

36.06%

41.58%

Non-eligible dividends

39.65%

43.68%

48.28%

Nova Scotia Non-Refundable Tax Credits

The government confirmed today that personal tax credits for 2018 will be indexed by 1.0%.   The maximum tax credits amounts and actual Nova Scotia tax credits for 2018 and 2019 are set out below.

Nova Scotia Non-Refundable Tax Credits

 

2018

2019

Maximum Amount

Nova Scotia Tax Credit

Maximum Amount

Nova Scotia Tax Credit

Basic Personal Amount

$8,481

$745

$8,481

$745

Spousal Amount

8,481

745

8,481

745

Eligible dependent amount

8,481

745

8,481

745

Age amount

4,141

364

4,141

364

Infirm dependent amount

2,798

246

2,798

246

CPP Contributions

2,594

228

 

 

EI Contributions

858

75

 

 

Pension income amount

1,173

103

1,173

103

Disability amount

7,341

645

7,341

645

Disability supplement

3,349

294

3,449

303

Tuition and education amounts

Variable

Variable

Variable

Variable

Adoption expenses

0

0

0

0

Medical expenses

Variable

Variable

Variable

Variable

Medical expenses (other dependents)

N/A

N/A

N/A

N/A

Caregiver amount

4,898

431

0

0

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 8.79% to arrive at the deduction from Nova Scotia Tax.  In the case of donations and gifts over $200, the credit is 21%

Personal Tax Credits

This budget proposes changes to the following personal credits/amounts:

Venture Capital Tax Credit

Effective 1 April 2019, the province intends to introduce a Venture Capital Tax Credit available to individual investors who invest in a venture capital corporation or fund. The tax credit rate will be 15%.

Corporate Tax Measures

Corporate Income Tax Rates

The budget confirmed there was no proposed changes to corporate tax.  As a result, Nova Scotia’s corporate income tax rates effective January 1, 2019 remain as follows:

Corporate Income Tax Rates — As of January 1, 2019

 

Nova Scotia

Combined Federal
and Nova Scotia

General

16%

31%

Small business*

3.0%

12%

* on first $500,000 of active business income

* 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.

Other Business Tax Measures

The minister also proposed the following business tax measures:

Innovation Equity Tax Credit

Effective 1 April 2019, the province intends to make the Innovation Equity Tax Credit

(IETC), which will be more narrowly focused and will phase out the existing equity tax

credit, available to corporations. The IETC was previously only available to individuals. The

province is proposing a tax credit rate for corporate investments of 15% to a maximum

investment of $500,000.

Venture Capital Tax Credit

Effective 1 April 2019, the province intends to introduce a Venture Capital Tax Credit

available to both individual and corporate investors who invest in a venture capital

corporation or fund. The tax credit rate will be 15%.

Harmonized Sales Tax

The budget does not include any changes to the harmonized sales tax rate of 15%.

Other Measures (Not Related to Tax)

Government Spending Highlights … Based on its 4 Priorities

Improve access to health care:

  • $10 million increase to further develop collaborative care teams
  • $2.9 million increase to open 15 residency spaces for specialty medical positions at Dalhousie University Medical School for a total of 65 seats
  • $1.1 million continued funding to open 10 family practice residency seats at Dalhousie University Medical School this year for a total of 46 seats
  • $2.2 million increase to improve access to hip and knee replacement surgeries
  • $1 million continued funding for 11 mental health and addictions staff to support an adolescent outreach program in 41 schools in western and northern Nova Scotia
  • $1 million increase to complete the province-wide SchoolsPlus expansion by September 2019

Education and preparing youth for the workforce:

  • $10.2 million increase to expand pre-primary classes
  • $67 million total funding this year for the regulated child care sector, including expanding subsidies for families
  • $15 million increase to continue implementing recommendations from the Commission on Inclusive Education
  • $1.4 million increase to complete the reinstatement of the Reading Recovery program to all elementary schools by September 2019
  • $3.6 million increase to the university operating grant as the province prepares to enter another multi-year memorandum of understanding with post-secondary institutions

Create conditions for economic growth:

  • $850,000 increase to enhance export development programming for Nova Scotia businesses
  • $500,000 increase for incubators and accelerators that support startup companies
  • $2 million increase for Invest Nova Scotia to fund projects that increase competitiveness in economic sectors
  • $620,000 increase to support growing immigration
  • $15 million total funding for this year to expand and create tax credits that encourage investment in new and growing Nova Scotia businesses
  • $415,000 increase to support Nova Scotia’s Canadian Fish and Seafood Opportunities Fund and build on export success
  • $1.7 million increase to move toward ecological forestry, including more silviculture
  • $2 million increase in funding to make progress on revitalizing tourism icons across the province

Support people and communities:

  • $14.2 million increase for programs that support adults and children with disabilities
  • $5.6 million in new funding to introduce the standard household rate which will increase income assistance payments to recipients
  • $5 million total funding this year for the third year of a three-year commitment to invest in poverty-reduction initiatives
  • $1.7 million increase to fully implement the exemption of child maintenance payments from income assistance calculations so parents have more money to take care of their children’s needs
  • $3 million total funding this year to help prevent domestic violence
  • $470,000 in new funding for sexual violence prevention work on university and Nova Scotia Community College campuses
  • $3 million increase as part of a three-year plan to create 1,500 new rent supplements and reduce wait lists by 30 per cent

(Source: Nova Scotia Government)