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Tax Alert 2023 No. 14, 22 March 2023
“We have gone from a province that was struggling with a declining economy and unsustainable public finances to a province that is dealing with challenges that come with growth.”
“Budget 2023–2024 continues the important work necessary to build on the growth we have seen in recent years and take advantage of the opportunities before us.”
New Brunswick Minister of Finance and Treasury Board Ernie Steeves
2023–24 budget speech
On 21 March 2023, New Brunswick Minister of Finance and Treasury Board Ernie Steeves tabled the province’s fiscal 2023–24 budget. The budget contains no new taxes and no tax increases.
The minister anticipates a surplus of $40.3 million for 2023–24 and projects surpluses for each of the next two years.
Following is a brief summary of the key tax measures.
Business tax measures
Corporate income tax rates
No changes are proposed to the corporate income tax rates or the $500,000 small-business limit.
New Brunswick’s 2023 corporate income tax rates are summarized in Table A.
Table A – 2023 New Brunswick corporate income tax rates1
|
NB |
Federal and NB combined |
|
|---|---|---|
|
Small-business tax rate2 |
2.50% |
11.50% |
|
General corporate tax rate2, 3 |
14.00% |
29.00% |
1 The rates represent calendar-year-end rates unless otherwise indicated.
2 The corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% small-business corporate income tax rate.
3 An additional tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a $100 million exemption to be shared by group members), effective for taxation years ending after 7 April 2022 (prorated for taxation years straddling this effective date).
Personal tax
Personal income tax rates
The budget does not include any changes to personal income tax rates other than the previously announced rate reductions last fall, which were effective for the 2023 and subsequent taxation years.
The 2023 New Brunswick personal income tax rates are summarized in Table B.
Table B – 2023 New Brunswick personal income tax rates
|
First bracket rate |
Second bracket rate |
|
Fourth bracket rate |
||||
|---|---|---|---|---|---|---|---|
|
$0 to $47,715 |
$47,716 to $95,431 |
$95,432 to $176,756 |
Above $176,756 |
||||
|
|
16.00% |
19.50% |
||||
For taxable income in excess of $165,430, the 2023 combined federal–New Brunswick personal income tax rates are outlined in Table C.
Table C – Combined 2023 federal and New Brunswick personal income tax rates
|
Bracket |
Ordinary income1 |
Eligible dividends |
Non-eligible dividends |
||
|---|---|---|---|---|---|
|
$165,431 to $176,7562 |
45.32% |
22.49% |
38.57% |
||
|
$176,757 to $235,6752 |
45.80% |
|
41.52% |
||
|
48.82% |
27.32% |
42.59% |
||
|
Above $235,675 |
52.50% |
32.40% |
46.83% |
||
1 The rate on capital gains is one-half the ordinary income tax rate.
2 The federal basic personal amount comprises two elements: the base amount ($13,521 for 2023) and an additional amount ($1,479 for 2023). The additional amount is reduced for individuals with net income in excess of $165,430 and is fully eliminated for individuals with net income in excess of $235,675. Consequently, the additional amount is clawed back on net income in excess of $165,430 until the additional tax credit of $222 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between $165,431 and $235,675.
Other tax measures
Property tax
Previously announced measures from the 2022–23 budget regarding provincial property tax rate reductions were accelerated with the introduction of legislation in November 2022. These proposed property tax rate reductions, which were intended to be phased in over the next two taxation years, will be fully implemented for the 2023 taxation year.
Carbon taxation
As previously announced, the Government of New Brunswick has opted to adopt the federal carbon backstop for carbon taxation. Up until recently, the province had applied a made-in-New Brunswick approach to carbon taxation.
Learn more
For more information, please contact your EY or EY Law advisor or one of the following professionals:
Dieppe
Dan LeBlanc
+1 506 388 7728 | dan.leblanc@ca.ey.com
Pauline Vautour
+1 506 388 7724 | pauline.vautour@ca.ey.com
Marc Léger
+1 506 388 7746 | marc.d.leger@ca.ey.com
Natacha Poirier
+1 506 388 7719 | natacha.poirier@ca.ey.com
Download this tax alert
Budget information: For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.