2021-22 Nova Scotia Budget Highlights

On Thursday, March 25, 2021, Nova Scotia Finance Minister Labi Kousoulis tabled the Province’s 2021-22 Budget. Titled A Fair and Prosperous Future: Path to Balance. Budget 2021-22 continues to focus on managing the pandemic and working towards economic recovery.

The Province projects a deficit of $705.5 million for 2020-21 and forecasts deficits of $584.9 million in 2021-22 and $217.5 million in 2022-23.

The following are highlights of the tax measures announced:

A. Corporate Tax Measures

Corporate Tax Rates

No new corporate income tax rate changes were announced in this year’s Budget. The current corporate income tax rates for 2021 are outlined below:

Confirmation of Property Tax Relief

Small Business Real Property Tax Rebate Program

The Small Business Real Property Tax Rebate Program provides qualified businesses a one-time rebate of a portion of their paid property taxes. Qualified businesses, including restaurants, gyms and hair salons, can choose a rebate of $1,000 or 50 percent of the commercial real property taxes paid for the final six months of the 2020-21 tax year. This program was previously announced on March 2, 2021; the online application form is expected to be available soon.

Tourism Accommodations Real Property Tax Rebate Program

The Tourism Accommodations Real Property Tax Rebate Program Part 2 provides qualified operators a one-time 50-percent rebate on payment of the first six months of their 2021-22 commercial property tax. This program was previously announced on March 12, 2021; applications for this program will open in Spring 2021.

B. Personal Tax Measures

Personal Tax Rates

No new personal income tax rate changes were announced in this year’s Budget. The top marginal personal income tax rate for Nova Scotia is 21 percent for 2021. The current top combined federal and Nova Scotia marginal rates for 2021 are as follows:

Extension of Equity Tax Credit for CEDIFS

The tax credit for investments in Community Economic Development Investment Funds (CEDIFs) was scheduled to expire on February 28, 2022; Budget 2021 has extended this tax credit by 10 years to February 28, 2032.

The tax credit for CEDIFs provides a 35-percent tax credit for individuals who invest up to $50,000 in a taxation year and hold their shares for a five-year period. Rollover tax credits provide an additional 20 percent when individuals retain their shares for an additional five years (10 years in total) and a further 10 percent when individuals retain their shares for a period of 15 years.