Provincial Budget Round-Up 2021

Evelyn Jacks

Several provinces have already introduced their 2021 provincial budgets, and today we're providing a round-up of what has been announced so far. Notably, the British Columbia budget will be released until April 20; and Newfoundland has not yet announced its budget date. More details on the April 6 Saskatchewan Budget and the April 7 Manitoba Budget appear below:

April 7 Manitoba Budget Changes 2021-22

  • A new Teaching Expense Tax Credit was introduced to mirror the federal Eligible Educator School Supply Tax Credit for the 2021 tax year. It allows for a 15% refundable tax credit of up to $1000 of eligible, unreimbursed expenses. Manitoba also continues to have a non-refundable monthly Education Amount for students: $120 part-time and $400 full-time.
  • No change. Manitoba’s Fitness Amount for those under 24 and Children’s Art amount for those under 16 will continue. The amounts are $500 per child; $1000 for those who are disabled.
  •  The Education Property Taxes will be phased out of property tax assessments in favour of an Education Property Tax Rebate of 25% starting in 2021 for residential and farm properties; others will receive a 10% rebate. These rebates will be sent by cheque after property taxes are paid. However, farm property owners will need to apply for the Farmland School Tax Rebate. The existing education property tax credits and advances, the Seniors School Tax Rebate, the Seniors Education Property Tax Credit will be reduced by 25% in 2021.
  • A new Retail sales tax exemption for personal services will start December 1, 2021.
  • Provincial Sales taxes on Online Platforms will begin on December 1, 2021: this includes Streaming Services, Online Marketplaces and Online Accommodation Platforms. This will not impact personal sales on platforms like Kijiji.
  • The threshold for Health and Post-Secondary Education Tax Levy will be raised to $1.75 million of annual remuneration, and the reduced rate threshold will increase to $3.5 million.
  • Interactive Digital Media Tax Credit will include new activities, including downloadable content, ongoing maintenance and updates, data management and analysis complimentary to the main product being developed. This is a credit of up to 40% of labour costs, marketing, and distribution expenses incurred in developing eligible (by certification process) interactive digital media products. Users must be able to interact with the product, and the credit cannot be used for operating systems, promotional products and adults-only video games. This credit was set to expire on December 31, 2022, but has now been made permanent.
  • The Small Business Venture Capital Tax Credit will increase to $500,000, with the maximum claimable tax credit rising to $120,000 from the current $67,500.
  • The Film and Video Production Tax Credits – the frequent filming bonus of 10% for the cost of salaries was available where the production of three or more films in 2 years was undertaken, but this was temporarily paused due to the pandemic. All companies eligible on March 31, 2020 will retain their status until March 31, 2022.
  •  Extensions of existing credits were announced:
    • The Book Publishing Tax Credit is now permanent
    • The Cultural Industries Printing Tax Credit is extended one year to December 31, 2022 – 35% refundable on salaries and wages.
    • Community Enterprise Development Tax Credit – extended one year to December 31, 2022 – 45% refundable tax credit on eligible shares for investment in business opportunities.
  • Indexing of Basic Personal Amount Continues in Manitoba, as follow
    • 2021: $9936 –1% indexing factor
    • 2022 $10,075 -1.4% indexing factor

2021 Provincial Budget Dates and Synopsis

Prov

Date

Summary of Changes

BC

4/20/2021

• Budget details pending

AB

2/25/2021

  • No personal or corporate tax changes.

SK

4/6/2021

• Active families refundable tax credit reinstated for 2021 (similar to former Canada Fitness Credit, but refundable)

• Home renovation tax credit (non-refundable). Expenses from Oct 2020 to Dec 2021 on 2021 return and for 2022 on 2022 return

• The small-business dividend tax credit rate for 2021 reduced from 3.866% of actual dividends to 1.949%

MB

4/7/2021

• A new Teaching Expense Tax Credit introduced

• The Education Property Taxes will be phased out of property tax assessments in favour of an Education Property Tax Rebate of 25% starting in 2021 for residential and farm properties; others will receive a 10% rebate. These rebates will be sent by cheque after property taxes are paid. However, farm property owners will need to apply for the Farmland School Tax Rebate.

• Retail sales tax exemption for personal services announced - Dec. 1, 2021

• Provincial Sales taxes on Streaming Services, Online Marketplaces and Online Accommodation Platforms will be levied as of December 1, 2021

• The threshold for Health and Post-Secondary Education Tax Levy will be raised to $1.75 million of annual remuneration; the reduced rate threshold increases to $3.5 million.

• Interactive Digital Media Tax Credit will include new activities and, together with the Book Publishing credit, has become permanent. Others have been extended by one year (see above)

• Vehicle registration fees will be reduced by 30% by 2023.

ON

3/24/2021

• CARE credit enhanced

• New refundable jobs training tax credit for 2021

QC

3/25/2021

• Small business dividend tax credit rate reduced from 4.61% of actual dividend to 3.93% as of 1/1/2022

• Refundable tax credit for home-support services for seniors enhanced starting in 2022.

• The corporate tax rate for small business decreases from 4.0% to 3.2% for tax years ending after 3/25/2021

NB

3/16/2021

  • No personal or corporate tax changes.
  • 33% increase in carbon tax as of April 1.

NS

3/25/2021

• Equity tax credit for CEDIF extended to 2022

PE

3/12/2021

• Basic personal amount increased $11,250

• Low-income tax reduction increased to $20,000

• The small business tax rate reduced to 1% as of 1/1/2022

NL

*

Budget Date Pending

NU

2/22/2021

No personal or corporate tax changes.

NT

2/4/2021

• Small business tax rate reduced from 4% to 2% as of 1/1/2021

• Carbon tax increases as of July 1

YT

3/4/2021

No personal or corporate tax changes.

* Where no date is specified, the budget dates have not been announced.

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Additional educational resources: RSVP now for an analysis of the April 19, 2021 budget and its impact on 2021/22 retirement and estate planning options at the May 20 Virtual CE Summit .