Canada | Yukon Budget 2024-25 confirms some indirect tax measures

On 7 March 2024, Yukon Finance Minister Sandy Silver tabled the territory's fiscal 2024-25 budget. The budget contains no income tax increases but confirms certain indirect tax measures.

The minister anticipates a surplus of CA$1.7m for 2023-24 and projects a surplus of CA$119m for 2024-25 and surpluses for each of the next four years (CA$127.9m for 2025-26, CA$73.5m for 2026-27, CA$141.9m for 2027-28, and CA$81.5m for 2028-29).

A brief summary of the key tax measures follows.

Corporate income tax rates

No changes are proposed to corporate income tax rates or the CA$500,000 small-business limit. Yukon's 2024 corporate income tax rates are summarized in Table A.

Table A — 2024 corporate income tax rates1

1 The rates represent calendar-year-end rates unless otherwise indicated.

2 The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate. These reductions are not reflected in the combined federal and Yukon rates above.

3 An additional federal tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a CA$100m exemption to be shared by group members).

Personal income tax rates

The budget does not include any changes to personal income tax rates. The 2024 Yukon personal income tax rates are summarized in Table B.

Table B — 2024 Yukon personal income tax rates

For taxable income exceeding CA$173,205, the 2024 combined federal-Yukon personal income tax rates are outlined in Table C.

Table C — Combined 2024 federal and Yukon personal income tax rates

1 The rate on capital gains is one-half the ordinary income tax rate.

2 The federal and territorial basic personal amounts comprise two elements: the base amount (CA$14,156 for 2024) and an additional amount (CA$1,549 for 2024). The additional amount is reduced for individuals with net income exceeding CA$173,205 and is fully eliminated for individuals with net income exceeding CA$246,752. Consequently, the additional amount is clawed back on net income exceeding CA$173,205 until the additional tax credit (CA$232 federally and CA$99 in Yukon) is eliminated; this results in additional federal and territorial income tax (e.g., 0.32% and 0.13%, respectively, on ordinary income) on taxable income between CA$173,206 and CA$246,752.

Other tax measures

Tobacco tax

In keeping with the existing indexation link with changes to the Consumer Price Index in the Tobacco Tax Act, the tobacco tax rates have increased from 32 cents to 35 cents per cigarette and from 32 cents to 35 cents per gram of tobacco (other than cigarettes and cigars), as of 1 January 2024.

Tax on vaping products

The budget confirms the government's intention to join the federally coordinated vaping product taxation framework in 2024-25. The new Yukon tax is expected to apply to vaping products starting in early 2025 and will be collected by the Canada Revenue Agency.

For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.

Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young LLP (Canada), Toronto

• Linda Tang
  
  
• Mark Kaplan
  
  
• Phil Halvorson
  
  
• Terri McDowell
  
  
• Trevor O'Brien
  
  
• Leslie Ivany

Ernst & Young LLP (Canada), Quebec and Atlantic Canada

• Albert Anelli
  
  
• Angelo Nikolakakis
  
  
• Brian Mustard
  
  
• Nicolas Legault
  
  
• Nik Diksic
  
  
• Philippe-Antoine Morin
  
  
• Joannie Ethier

Ernst & Young LLP (Canada), Prairies

• Mark Coleman
  
  
• Liza Mathew

Ernst & Young LLP (Canada), Vancouver

• Eric Bretsen

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.