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2013-2014 New Brunswick budget highlights


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March 27, 2013

Budget highlights

Yesterday afternoon, Finance Minister Blaine Higgs presented the New Brunswick government’s 2013-2014 Budget, “Managing Smarter for a Brighter Future”.

Economic results and indicators

  • 2012-2013
    • 2012-2013 deficit projected at $411.1 million
    • Government spending over budget by $32.3 million
    • Government revenues under budget by $195.8 million
    • Economic growth of 0.7% for 2012, below the 1.3% projected in March, 2012
    • Overall employment declined modestly in 2012, with full-time jobs increasing by 1,500
  • 2013-2014
    • Economic growth of 0.5% projected for 2013
    • 2013-2014 deficit projected at $478.7 million, including one-time pension expense of $110 million

Personal tax rate changes

  • Effective July 1, 2013, personal income tax rates will be returned to the rates that applied in 2006; this results in the largest percentage increases for people in the top two income brackets earning  $77,908 to $126,662 and over
  • The rates will be changed as follows:
    • from 9.1% to 9.68% for the first tax bracket (up to $38,954)
    • from 12.1% to 14.82% for the second tax bracket (from $38,954 to $77,908)
    • from 12.4% to 16.52% for the third tax bracket (from $77,908 to $126,662)
    • from 14.3% to 17.84% on the fourth tax bracket (over $126,662)
  • All tax brackets and credits will continue to be indexed to inflation

Corporate tax rate changes

  • Effective July 1, 2013, the general corporate income tax rate will increase from 10% to 12%
  • No change in the small business corporate income rate of 4.5%

Other tax measures

  • No change to the provincial harmonized sales tax
  • Increases in tobacco taxes
  • Enhancements to the New Brunswick Small Business Investor Tax Credit to be outlined

Government spending

  • Reviews are underway in various government departments to identify efficiencies in service delivery
  • New 2013-2014 investments totaling $70 million include:
    • $16 million in 2013-14 as part of a five-year, $80-million investment in innovation in order to jump-start the economy
    • the establishment of the new Energy Institute
    • increases for a number of poverty-reduction initiatives including social assistance rate increases and improvements
    • additional funding for special care homes, specialized care beds, and community residences and funding for the nursing home renovation and replacement plan
    • the continued rollout of the diabetes and mental health strategies
    • increased funding for early childhood development

For further details, we refer you to the Government of New Brunswick website.

Contacts

Canadian Managing Partner, Tax
Heather Evans
416-601-6472

National Tax Policy Leader
Albert Baker
416-643-8753 

New Brunswick
David Nielsen
Partner, Tax
506-663-6655

 

This publication is produced by Deloitte LLP as an information service to clients and friends of the firm, and is not intended to substitute for competent professional advice. No action should be initiated without consulting your professional advisors. Your use of this document is at your own risk.