On 16 March 2021, New Brunswick Minister of Finance and Treasury Board Ernie Steeves tabled the province’s fiscal 2021–22 budget. The budget contains no significant tax measures affecting individuals and corporations.
The Minister anticipates a deficit of CA$244.8 million1 for 2021–22 and projects deficits for each of the next two years.
The following is a brief summary of the key tax measures.
Business tax measures
Corporate tax rates
No changes are proposed to the corporate tax rates or the $500,000 small-business limit.
New Brunswick’s 2021 corporate tax rates are summarized in Table A.
Table A – 2021 New Brunswick (NB) corporate tax rates
2021 |
||
NB |
Federal and NB combined |
|
Small-business tax rate* |
2.50% |
11.50% |
General corporate tax rate* |
14.00% |
29.00% |
* Rates represent calendar-year rates unless otherwise indicated.
Personal tax
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2021 New Brunswick personal tax rates are summarized in Table B.
Table B – 2021 New Brunswick personal tax rates
First bracket |
Second bracket rate |
Third bracket rate |
Fourth bracket rate |
Fifth bracket |
$0 to $43,835 |
$43,836 to $87,671 |
$87,672 to $142,534 |
$142,535 to $162,383 |
Above $162,383 |
9.68% |
14.82% |
16.52% |
17.84% |
20.30% |
For taxable income in excess of $151,978, the 2021 combined federal-New Brunswick personal income tax rates are outlined in Table C.
Table C – Combined federal and New Brunswick 2021 personal tax rates
Bracket |
Ordinary income* |
Eligible dividends |
Non-eligible dividends |
$151,979 to $162,383** |
47.16% |
25.03% |
40.69% |
$162,384 to $216,511** |
49.62% |
28.43% |
43.52% |
Above $216,511 |
53.30% |
33.51% |
47.75% |
* The rate on capital gains is one-half the ordinary income tax rate.
** The federal basic personal amount comprises two elements: the base amount ($12,421 for 2021) and an additional amount ($1,387 for 2021). The additional amount is reduced for individuals with net income in excess of $151,978 and is fully eliminated for individuals with net income in excess of $216,511. Consequently, the additional amount is clawed back on net income in excess of $151,978 until the additional tax credit of $208 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between $151,979 and $216,511.
Other tax measures
Carbon tax
Effective 1 April 2021, the province will increase its tax on carbon-emitting products from $30 per tonne to $40 per tonne, with a result of increasing its carbon tax by 2.21¢ per liter for gasoline and by 2.68¢ per liter for diesel.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), Dieppe
- Dan LeBlanc
- Pauline Vautour
- Marc Léger
- Natacha Poirier
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
