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Provincial Budget Legislation - Status Update 

Canadian Tax Adviser

 

June 05, 2012

 

The following is a summary of provincial budget legislative changes in Ontario, Saskatchewan, Nova Scotia and New Brunswick that discusses whether the legislation is substantively enacted for Canadian GAAP purposes or enacted for U.S. GAAP purposes.

Ontario

The 2012 Ontario budget proposed to freeze the general corporate income tax rate at the current 11.5% level until the budget is balanced. Previously, the government intended to reduce the rate to 11% on July 1, 2012 and to 10% on July 1, 2013. For the current status of the general corporate income tax rate freeze, see our Canadian Tax Adviser article "Ontario 11.5% Corporate Rate To Be Substantively Enacted June 20, 2012".

 

Saskatchewan
Bill 43, which enacts tax changes announced in Saskatchewan's 2012 budget, was passed on May 16, 2012. Although the budget did not contain any corporate or personal tax rate changes, the bill includes details of the corporate income tax rebate on new rental housing and the restriction on refundability of the Research and Development (R&D) Tax Credit.

 

Nova Scotia
Bill 17, which enacts tax changes announced in Nova Scotia's 2012 budget, received Royal Assent on May 17, 2012. Bill 17 reduces the small business income tax rate to 3.5% (from 4%) effective January 1, 2013, and lowers the province's Harmonized Sales Tax (HST) rate beginning in 2014. Since the bill has received Royal Assent, the budget measures are considered enacted for purposes of U.S. GAAP as of May 17, 2012. The bill received first reading on April 12, 2012, and is considered substantively enacted for purposes of Canadian GAAP as of that date, as Nova Scotia has a majority government.

 

New Brunswick
Bill 42, which increases New Brunswick's Financial Corporation Capital Tax rate to 4% (from 3%) effective April 1, 2012, received third reading on May 17, 2012. The bill received first reading on May 11, 2012, and is considered substantively enacted for purposes of Canadian GAAP as of that date, as New Brunswick has a majority government.

 

For more information, contact your KPMG adviser.

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