News and Insights

New Brunswick Budget 2011-12

Tax Development Mar 22, 2011

On March 22, 2011, the Finance Minister, Blaine Higgs, presented New Brunswick’s 2011-12 budget. With an estimated $448.8 million deficit expected for 2011-12, the budget’s focus is on reduced spending and increasing revenue measures. 

Commodity Tax Measures 

In order to achieve higher provincial revenues, two commodity tax increases have been introduced. Effective midnight, March 22, 2011, there will be tax increases on tobacco products and on gasoline and motive fuel (diesel). 

Tobacco tax increase 

The tax increase on tobacco products will consist of a 5.25 cent increase per cigarette, tobacco stick, or gram of fine-cut tobacco. It is expected that this increase will generate an additional $25 million in revenue, which will be used to subsidize the additional costs smoking imposes on the health care system, as well as act as a deterrent for the future use of tobacco products. Retailers and wholesalers must incorporate these tax increases into their tobacco prices, effective March 23, 2011, and complete an inventory of tobacco products on hand in order to remit the additional tax on these products to the government. 

Gasoline and motive fuel tax increase 

The provincial tax on gasoline will increase by 2.9 cents to 13.6 cents per litre, while the tax on diesel fuel will increase by 2.3 cents to 19.2 cents per litre. This will create an additional $44 million in revenue for the province, which will aid in funding and maintaining a safe and efficient road transportation system. Gasoline retailers must incorporate the increase into their prices, effective March 23, 2011, and must also complete an inventory of gasoline and motive fuel (diesel) on hand in order to remit the additional tax. 

Income Tax Measures 

The New Brunswick income tax rate of 10% for general corporations will become effective on July 1, 2011, and the provincial government re-affirmed its commitment not to reduce the rate further. The general corporate tax rate had previously been scheduled to decline to 8%, effective July 1, 2012. 

The small business income tax rate of 5% will be reduced to 4.5%, effective January 1, 2012. No further rate reductions were announced. 

Additional information on the New Brunswick 2011-12 budget is available on the province’s web site at: 

New Brunswick Budget 2011-12