Executive summary
On 26 May 2022, Nunavut Finance Minister Lorne Kusugak tabled the territory’s fiscal 2022/23 budget. The budget contains no new taxes and no tax increases.
The Minister anticipates an operating deficit of CA$31.0 million1 for 2021/22 and projects an operating surplus of $40.3 million for 2022/23.
The following is a brief summary of the key tax measures.
Detailed discussion
Business tax measures
Corporate income tax rates
No changes are proposed to the corporate income tax rates or the $500,000 small-business limit.
Nunavut’s 2022 corporate income tax rates are summarized in Table A.
Table A – 2022 Nunavut corporate income tax rates*
| 2022 | ||
| Nunavut | Federal and Nunavut combined | |
| Small-business tax rate** | 3% | 12% |
| General corporate tax rate** *** | 12% | 27% |
* Rates represent calendar-year rates.
** The 2021 federal budget proposed to temporarily reduce the federal corporate income tax rate for qualifying zero-emission technology manufacturers by 50% (i.e., 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), applicable for taxation years beginning after 2021. The reduced tax rates are proposed to be gradually phased out for taxation years beginning in 2029 and fully phased out for taxation years beginning after 2031.
*** The 2022 federal budget proposed an additional tax on banks and life insurers. See EY Global Tax Alert, Canada’s Federal Budget 2022/23 focuses on growing a more resilient economy, dated 8 April 2022 for details.
Personal tax
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2022 Nunavut personal income tax rates are summarized in Table B.
Table B – 2022 Nunavut personal income tax rates
| First bracket rate | Second bracket rate | Third bracket rate | Fourth bracket rate |
| $0 to $47,862 | $47,863 to $95,724 | $95,725 to $155,625 | Above $155,625 |
| 4% | 7% | 9% | 11.50% |
For taxable income in excess of $100,392, the 2022 combined federal-Nunavut personal income tax rates are outlined in Table C.
Table C – Combined 2022 federal and Nunavut personal income tax rates
| Bracket | Ordinary income* | Eligible dividends | Non-eligible dividends |
| $100,393 to $155,625 | 35% | 19.97% | 26.87% |
| $155,626 to $221,708** | 40.88% | 28.09% | 33.63% |
| Above $221,708 | 44.50% | 33.08% | 37.79% |
*The rate on capital gains is one-half the ordinary income tax rate.
** The federal basic personal amount comprises two elements: the base amount ($12,719 for 2022) and an additional amount ($1,679 for 2022). The additional amount is reduced for individuals with taxable income in excess of $155,625 and is fully eliminated for individuals with taxable income in excess of $221,708. Consequently, the additional amount is clawed back on taxable income in excess of $155,625 until the additional tax credit of $252 is eliminated; this results in additional federal income tax (e.g., 0.38% on ordinary income) on net income between $155,626 and $221,708
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), Toronto
- Linda Tang
- Mark Kaplan
- Phil Halvorson
- Terri McDowell
- Trevor O’Brien
Ernst & Young LLP (Canada), Quebec and Atlantic Canada
- Albert Anelli
- Angelo Nikolakakis
- Brian Mustard
- Nicolas Legault
- Nik Diksic
- Philippe-Antoine Morin
Ernst & Young LLP (Canada), Prairies
- Mark Coleman
- Liza Mathew
Ernst & Young LLP (Canada), Vancouver
- Eric Bretsen
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
