On April 4, 2013, Minister of Finance, Maureen MacDonald, presented Nova Scotia’s 2013-2014 budget. This year’s budget was developed with an aim to creating a balanced budget with a focus on job creation and economic growth, providing better health care, making life affordable, and investing in children’s education and programs to support women. This budget forecasts a modest surplus of $16.4 million, and achieves last year’s goal for a balanced budget starting in 2013.
This year’s budget proposes several income and commodity tax changes for the upcoming year, as noted below.
Income Tax Measures
The small business income tax rate will decrease for the fourth straight year from the current rate of 3.5% to 3.0%, effective January 1, 2014. However, this decreased rate will apply to a lower threshold amount, with the first $350,000 of taxable income for eligible small businesses subject to the reduced tax rate. Previously, the threshold income amount was $400,000.
In addition, the province announced that several tax credits will remain in place for the current year, including the Film Industry Tax Credit, the Digital Media Tax Credit, the Affordable Living Tax Credit and the Poverty Reduction Tax Credit. Furthermore, Nova Scotia will provide assistance to seniors, through tax reductions, and to new graduates through enhanced rebate programs.
Commodity Tax Measures
This year’s budget proposes an increase in tobacco taxes for the first time in four years, with the rate increased to 23.52 cents per cigarette or 22 cents per gram of fine-cut tobacco, effective April 5, 2013. This represents a 2 cent increase in the tax on each of these tobacco products.
The government also confirmed its intention to reduce the current HST rate of 15% by 1% in each of 2014 and 2015. Furthermore, it was noted that the province will continue to support families by providing HST rebates on purchases of children’s clothing, footwear and diapers, books and home energy products. Since 2009-2010, Nova Scotia has paid out more than $380 million in HST rebates on these family purchases. In addition, HST rebates are available to first-time new home buyers.
Additional information on the Nova Scotia 2013-2014 budget is available on the province’s web site at: