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Canada: Nunavut issues budget 2018-19

Executive summary

On 28 May 2018, Nunavut Finance Minister David Akeeagok tabled the territory’s fiscal 2018-19 budget. The budget contains no new taxes and no tax increases.

The Minister anticipates a fiscal deficit of CA$39 million1 for 2017-18, and projects a fiscal deficit for $28 million for 2018-19.

Following is a brief summary of the key tax measures.

Detailed discussion

Business tax measures

Corporate tax rates

No changes are proposed to the corporate tax rates or the $500,000 small-business limit.

Nunavut’s 2018 and 2019 corporate tax rates are summarized in Table A.

Table A: Corporate tax rates

 
2018
2019
 
Nunavut
Federal and Nunavut combined
Nunavut
Federal and Nunavut combined

Small-business tax rate*,**

4.00%

14.00%

4.00%

13.00%

General corporate tax rate

12.00%

27.00%

12.00%

27.00%

* The small-business rate is prorated based on a 31 December year end.

** On 24 October 2017, the Federal Government tabled a notice of ways and means motion to implement reductions in the small-business corporate income tax rate, which were announced on 16 October 2017. The federal small-business rate is reduced from 10.5% to 10.0% effective 1 January 2018 and will be further reduced to 9.0% effective 1 January 2019.

Personal tax

Personal income tax rates

The budget does not include any changes to personal income tax rates.

The 2018 Nunavut personal tax rates are summarized in Table B.

Table B: Nunavut personal tax rates

First bracket rate
Second bracket rate
Third bracket rate
Fourth bracket rate

$0 to $44,437

$44,438 to $88,874

$88,875 to $144,488

Above $144,488

4.00%

7.00%

9.00%

11.50%

For taxable income in excess of $93,208, the 2018 combined federal-Nunavut personal income tax rates are outlined in Table C.

Table C: Combined 2018 federal and Nunavut personal tax rates

Bracket
Ordinary income*
Eligible dividends
Non-eligible dividends

$93,209 to $144,489

35.00%

19.97%

25.76%

$144,490 to $205,842

40.50%

27.56%

32.14%

Above $205,842

44.50%

33.08%

36.78%

* The rate on capital gains is one-half the ordinary income tax rate.

Fuel tax

The Minister announced the end of the fuel tax rebate for mining exploration. The rebate will be replaced by a program administered by the Department of Economic Development and Transportation to assist companies involved in mining exploration to engage more effectively with communities. The department will receive $3.3 million over three years.

Other tax measures

Carbon tax

The Minister announced that Nunavut does not intend to administer a territorial carbon tax. The federal backstop carbon pricing system will therefore be applicable in Nunavut.

Endnote

1. Currency references in this Alert are to CA$.

EYG no. 02910-181Gbl

Download this Tax Alert as a PDF file.

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