Nunavut budget 2024-25 tabled

• The Nunavut budget for 2024/2025 has been tabled.
  
  
• The budget contains no new taxes and no income tax increases.
  
  
• This Alert summarizes the key tax measures.

On 26 February 2024, Nunavut Finance Minister Lorne Kusugak tabled the territory's fiscal 2024-25 budget. The budget contains no new taxes and no income tax increases.

The minister anticipates an operating deficit of CA$14.6m for 2023-24 and projects an operating deficit of CA$21.0m for 2024-25.

A brief summary of the key tax measures follows.

Corporate income tax rates

No changes are proposed to the corporate income tax rates or the CA$500,000 small-business limit.

Nunavut's 2024 corporate income tax rates are summarized in Table A.

Table A — 2024 Nunavut corporate income tax rates1

1 These rates are 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 Nunavut rates above.

3 An additional 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 Nunavut personal income tax rates are summarized in Table B.

Table B — 2024 Nunavut personal income tax rates

For taxable income exceeding CA$111,733, the 2024 combined federal-Nunavut personal income tax rates are outlined in Table C.

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

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 (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 of CA$232 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between CA$173,206 and CA$246,752.

Other tax measures

Liquor tax

No coming-into-force date was announced in the budget for the liquor tax that was enacted in 2022 on alcohol consumed or imported into the territory. The government indicates in the budget that it is finalizing the rates and other administrative matters.

Tax on vaping products

In accordance with Nunavut's agreement with the federal government to participate in the coordinated vaping product taxation framework, the Canada Revenue Agency will begin, on 1 July 2024, collecting Nunavut tax on vaping products sold in the territory. The tax will be levied in addition to the federal tax, and the rate will be the same as the federal rate

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.