On April 3, 2012, Finance Minister, Graham Steele, presented Nova Scotia’s 2012–2013 budget. This year’s budget was developed with a view to guiding strategic investments into the creation of reliable jobs, driving solid economic growth, and responding to Nova Scotians’ desire for a better life through health care improvements, investments in education and by putting money back into the hands of families, while ensuring that the province lives within its means.
Now in year three of a four-year plan to get the province back to balance, this budget forecasts a deficit of $211 million, and projects that the province will have a balanced budget starting in 2013.
This year’s budget proposes several important tax changes for the upcoming year, and offers a few hints regarding expected changes for the future, which have been summarized below.
Income Tax Measures
The small business income tax rate will decrease for the third straight year from the current rate of 4.0% to 3.5%, effective January 1, 2013. This decrease will apply to the first $400,000 of taxable income for eligible small businesses.
The Large Corporations Tax on capital will be eliminated for non-financial institutions, effective July 1, 2012. This tax is being eliminated to keep a promise that was previously made by the current government, and it is estimated that this proposal will impact roughly 2,700 taxpayers.
Commodity Tax Measures
This year’s budget did not propose any changes to commodity tax measures and made it clear that home heating and electricity purchases would not become taxable. In addition, the government announced that it has built some potentially significant tax reductions into the province’s four-year financial plan, including one percent reductions in the HST rate in each of 2014 and 2015. In a separate announcement, Nova Scotia’s Premier Darrell Dexter indicated that legislation for the HST reductions will be introduced this spring.
Additional information on the Nova Scotia 2012-2013 budget is available on the province’s web site at:
Nova Scotia Budget 2012-2013.