April 6, 2011 No. 2011-12
	Highlights of the 2011 Nova Scotia Budget Nova Scotia Finance Minister Graham Steele tabled the province’s 2011 budget on April 5, 2011. The budget projects a surplus of $447 million in 2010-11, and deficits of $390 million in 2011-12 and $216 million in 2012-13. The government projects a balanced budget in 2013-2014. The budget includes some corporate and personal tax changes, as well as some interesting fiscal measures to stimulate investments and job creation. Highlights of tax measures announced in the budget are summarized below. Business Tax Changes Small business income tax rate The budget says the government will reduce the small business corporate income tax rate to 4% (from 4.5%), effective January 1, 2012. The measure will be prorated for taxation years that straddle January 1, 2012. The small business income tax rate currently applies to the first $400,000 of active business income earned by a Canadian-controlled private corporation. Large corporations tax The budget confirms the reduction of the Large Corporations Tax on capital of non-financial institutions (with taxable capital of $10 million or more) to 0.05% (from 0.1%), effective July 1, 2011. As scheduled, the tax will be eliminated on July 1, 2012.   Film industry and digital media tax credits The government has reaffirmed its commitment to the film industry and these tax credit programs by enhancing the Film Industry Tax Credit and Digital Media Tax Credits, announced in December 2010. The province removed the total production costs cap for the film industry tax credit. This allows producers to claim between 50% and 65% of eligible Nova Scotia labour without any cap, thereby encouraging them to hire locally. Personal Tax Changes Personal income tax credits The basic amount is increased by $250 to $8,481 (from $8,231), effective January 1, 2011. This increase to the basic personal credit is worth about $22 per person in 2011. The province’s other non-refundable personal income tax credits will also increase in the same proportion for the 2011 taxation year. Fiscal Measures Equity tax credit The Equity Tax Credit is designed to assist Nova Scotia small businesses, co-operatives and community economic development initiatives in obtaining equity financing by offering a personal income tax credit to individuals investing in eligible businesses. The budget announced that more than $1 million in new incentives will be offered through the Equity Tax Credit. Productivity investment program With a re-allocation of existing funds, and a new allocation in this budget, the government will invest more than $200 million to make the “jobsHere” plan happen. In this regard, the Productivity Investment Program, which has an annual estimated value of $25 million, will provide incentives for businesses to become more productive by supporting investments in capital, innovation and employee skills. We Can Help Your KPMG adviser can help you assess the effect of the tax changes in this year’s Nova Scotia budget on your personal finances or business affairs, and point out ways to take advantage of their benefits or ease their impact. We can also keep you abreast of the progress of these proposals as they make their way into law and help you bring any concerns you may have to the attention of the Nova Scotia Ministry of Finance.
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