The Honourable Allen F. Roach, Prince Edward Island’s Minister of Finance and Chair of the Treasury Board, presented the province’s 2016 budget on April 19, 2016. This year’s budget focused on growing the economy and workforce, investing in education and youth, and maintaining front-line services, while ensuring that the deficit continues to decline. Only one significant commodity tax change was announced.
As anticipated, this year’s budget included the announcement of a 1% increase in the HST rate to 15%. This will not come into effect until October 1, 2016, which is a different effective date than the one which will be used for upcoming HST rate increases in New Brunswick and Newfoundland and Labrador – July 1, 2016. The change will, however, make the HST rate consistent in all three provinces. For “large businesses” incurring expenses in Prince Edward Island, this change in rate will also directly impact the calculation of the recapture of input tax credits on restricted categories of expenses. It is expected that further information on the transitional rules for the rate change will be released at a later date.
On the income tax side, the province will introduce a complementary 10% increase to the refundable PEI Sales Tax Credit, effective July 2016. The province indicated that this measure will assist almost 50,000 Islanders.
Further information on Prince Edward Island’s 2016 budget may be found on the province’s web site at:
Prince Edward Island Budget 2016