Following recent trends, most provincial governments made only modest changes affecting personal taxes in their 2011 budgets.
The central reality that continues to dog most provincial economies is that governments simply don’t have the cash to ease the tax burden, as they struggle to reduce government deficits after pumping stimulus money into their local economies following the global credit crisis and recession of 2008-09.
Still, some provinces offer a few small goodies for taxpayers. These include increases in personal income tax exemptions, as well as some reductions in property taxes.
The only major tax hike was in Quebec: premiums for the Quebec Pension Plan will rise by 0.15% per year over six years, starting in 2012. There is also a provision for further potential increases in QPP premiums of up to 0.1% a year beginning in 2018 and in subsequent years.
Here’s a look at each province’s recent budget measures:
British Columbia. There were no new measures because the budget came down during the ruling Liberal Party’s leadership race last February. Nor is much expected in the near term because the government of new leader Christy Clark will be scrambling to keep its deficit down after the narrow defeat of the province’s HST in an August referendum.
Alberta. Alberta has racked up big deficits to ensure that its economy keeps growing, so there is little in the way of tax cuts. The education portion of property taxes, after being frozen or reduced in each of the past 18 years, will drop by almost 8% in 2012.
Saskatchewan. Basic amounts that may be claimed for personal and spousal exemptions will increase by $1,000, and the dependent child exemption will rise by $500. There will also be decreases in the education portion of property taxes.
Manitoba. Increases of $1,000 each for personal, spousal and eligible dependent exemptions will be spread over four years, from 2011 to 2014. The primary caregiver tax credit will increase to $1,275 from $1,020.
Ontario. Hit harder in 2008 than most of the other provinces, Ontario has no money for tax cuts. But the province is combining payments for its sales tax credit, energy and property tax credit and the Northern Ontario energy credit into one payment called the Ontario trillium benefit, which will be paid monthly instead of quarterly as of July 2012.
Quebec. To encourage low-income seniors to keep working, a tax credit will be phased in from 2012 to 2016 on earned income between $5,001 and $15,000 for those over age 65 to a maximum annual credit of $120. As well, eligibility criteria have been broadened for the refundable tax credit for unpaid caregivers of the elderly.
New Brunswick. Besides delaying previously announced income tax rate cuts for 2012, the top rate has been raised back up to the 2010 level of 14.3%. The home-energy assistance program has been reinstated, providing $100 for families with income of less than $28,000. Residential property tax increases have been capped at 3%.
Nova Scotia. The basic personal income tax exemption rises by $250 for 2011. Seniors who receive the federal guaranteed income supplement are exempted from personal income taxes, retroactive to the 2010 tax year.
Prince Edward Island. Personal income taxes have been trimmed for families receiving social assistance. There will also be a new non-refundable community development equity tax credit of 35% on up to $20,000 invested by P.E.I. residents in eligible businesses.
Newfoundland And Labrador. Still flush with oil and gas revenues, the province is offering a full tax rebate of the 8% provincial portion of the harmonized sales tax on residential electricity and heating bills. As well, there is a new, non-refundable child-care tax credit. IE