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2012 Nova Scotia budget highlights


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Canadian tax alert, April 3, 2012

The Nova Scotia Minister of Finance, the Hon. Graham Steele, presented the government's 2012-2013 budget in the House of Assembly this afternoon. The following is a summary of the tax highlights contained in the budget.

Economic context

  • The 2012 Budget anticipates a provincial deficit for fiscal 2012-2013 of $211.2 million, which is $49.6 million lower than the $260.8 million deficit forecast for 2011-2012.
    This decrease is primarily due to increased revenue through HST ($61.1 million), corporate tax ($29 million), personal tax ($133.5 million), and federal transfers ($229.6 million), offset with lower offshore royalties ($112 million) and increased expenses ($337.6 million).
    The 2012-2013 deficit is forecast on revenues of $9.3 billion and expenses of $9.5 billion.
  • The Department of Finance is projecting real GDP growth of 1.7% for 2012 and 1.9% for 2013.
  • Net debt to GDP is expected to drop from 35.2% in 2012 to 31.2% in 2016.
  • The government is predicting a balanced budget in 2013 and has mentioned they plan to reduce the HST from 15% to 14% in 2014 and further reduce the HST to 13% in 2015.

Measures concerning business

  • The small business tax rate will be reduced from 4.0% to 3.5% effective January 1, 2013 on the first $400,000 of taxable income for eligible Canadian Controlled Private Corporations.
  • The government reaffirmed the phase out of the capital tax, as previously announced in the 2006-2007 budget. The tax will be eliminated on July 1, 2012. This is expected to save businesses $16.3 million.

Measures concerning individuals

  • The eligible dependant and spouse amounts will increase $8,481 to match the basic personal amount in 2012.
  • The Affordable Living Tax credit and the Poverty Reduction Tax credits will both be increased to $255 and $250 respectively for those who qualify.
  • Increased tax credits will provide savings of $7.5 million to 78,000 low income Nova Scotians.
  • $7.7 million in provincial rebates will be paid to 17,000 low-income seniors who receive the Guaranteed Income Supplement equal to the amount of provincial income tax they paid.

Other tax measures

  • Further investment will be made in workplace productivity and innovation with $15 million earmarked to help businesses with the purchase of technologically advanced machinery, and $9 million for skills training.
  • A $15 million regional venture capital fund will help provide much needed early-stage seed capital.
  • The Equity Tax Credit and the Labour-Sponsored Venture Capital Tax Credit were scheduled to expire on February 29, 2012. They have both been extended to February 28, 2022.

For further details, we refer you to the Department of Finance website.

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