2016-2017 Prince Edward Island budget highlights
Canadian tax alert
On April 19, 2016, Finance Minister and Chair of Treasury Board Allen F. Roach presented the 2016-2017 Prince Edward Island budget. The following is a summary of the tax highlights from the budget.
Overall fiscal position and assumptions
- The projected deficit is $27.7 million for fiscal year ended March 31, 2016, higher than the original estimated deficit of $19.9 million in budget 2015-2016.
- The deficit is projected to be $9.6 million for fiscal year ended March 31, 2017 but surpluses are projected in 2017-2018 ($9.2 million) and in 2018-2019 ($24.5 million).
- The net debt to GDP ratio is expected to decrease from 35.4% in 2015-2016 to 31.8% in 2018-2019.
- The unemployment rate was 10.4% in 2015, down 0.2 percentage points from 2014.
- GDP growth is estimated to be 1.2% in 2015 and 1.4% in 2016 and in 2017.
Measures concerning business
- The budget contains no changes in corporate tax rates and introduced no new taxes or fees.
Measures concerning individuals
- The basic personal amount will be increased to $8,000 from $7,708 for the 2016 and subsequent taxation years. The spousal and eligible dependant amounts will also be increased.
- Under the low-income tax reduction program, the basic, spousal, equivalent-to-spouse, and child amounts will each increase by $50 effective for the 2016 and subsequent years.
- The refundable sales tax credit will be increased by 10% effective July 2016. This will increase the basic credit amount to $110 and the spouse, equivalent to spouse and supplement amounts to $55. The maximum amount for the enhanced credit will be $220.
Sales and other tax measures
- The provincial portion of the HST will increase from 9% to 10%, effective October 1, 2016. Therefore, the joint federal-provincial HST rate will rise from 14% to 15% as of that date.
- The current 1% rate under the Real Property Transfer Tax Act will be reduced to 0%, effective October 1, 2016 for all first-time home buyers.
For further details, we refer you to the Ministry of Finance website.