On April 6, 2018, Minister of Finance Heath MacDonald presented the 2018 Prince Edward Island budget, touting a slight surplus of $1.5 million. This year’s budget included increased investments in healthcare, and education, as well as some tax relief for residents, through the increase of the Basic Personal Amount by $1,000 over two years. The budget also announced that the small business tax will decrease to 4 percent from 4.5 percent.
In addition to these measures, the budget included some interesting commodity tax measures.
Rebate on electricity, and lower emitting heat sources.
This year’s budget announced a rebate on the provincial portion of the HST on the first block of residential electricity (i.e., the first 2,000 kilowatts used per billing period per household). This rebate will be credited directly to customers on their residential electricity bills. In addition, the provincial portion of the HST on lower emitting heat sources, including firewood, pellets, and propane will be eligible for a point-of-sale rebate or credit. The dates for these initiatives will be announced at a later date.
Prince Edward Island announced it will enter into a coordinated cannabis tax framework with the federal government. Under this tax framework, the amount of duty on cannabis products will equal the greater of $1 per gram and 10% of the producer’s selling price and will be collected by the federal government through the use of the federal excise tax system. The province will receive 75% of the duty amount on products intended for sale in Prince Edward Island.
Additional information on the 2018 Prince Edward Island budget is available on the province’s website at:
If you have any questions about how these proposed or impending PST changes might impact your organization, please do not hesitate to call the Ryan TaxDirectTM line at 1.800.667.1600.