Budget Bulletin: Tax Measures

The Nova Scotia government has announced three tax increases and one extension in its 2002-03 budget. Individuals and businesses are affected.

• Provincial Motive Fuel (Gasoline) Tax: Two cent per litre increase

Nova Scotians have been asking the government to invest in the province's transportation infrastructure. The Nova Scotia government will dedicate 100 per cent of increased revenue from its gasoline tax to improve highways, roads and bridges.

Effective midnight April 4, the provincial gasoline tax will increase from 13.5 cents to 15.5 cents per litre of gasoline. The tax on diesel fuel will remain the same. Approximately $23.2 million in additional revenue will be dedicated to highway improvements such as 100-series construction, repaving of routes and trunk highways, and cost-shared paving of subdivision streets. The motive fuel tax was last increased in 1993.

• Tobacco Tax: Increases for all tobacco products

The greatest deterrent to smoking, especially for young people, is higher cigarette prices. Effective midnight April 4, the Nova Scotia government will increase tobacco taxes by $5 per carton of 200 cigarettes, bringing the provincial tax on a carton of cigarettes to $21.04. The tax for cigarette sticks will increase by $7.86 for 200. Fine-cut tobacco will rise by $7.06 per 200 grams. This is in keeping with recent tobacco tax increases in other provinces, including Prince Edward Island and Newfoundland.

Nova Scotia expects to raise an additional $23.6 million in tobacco tax revenue. The government estimates that it will collect a total of $138.5 million in tobacco taxes for 2002-03.

• Gypsum Tax: Four cent per ton increase

Nova Scotia is a world-class gypsum producer, accounting for 85 per cent of Canada's production and seven per cent of world production. There are four gypsum operators in the province. All gypsum operators currently pay a tax of 12 cents per ton, a rate that has not changed since 1975. Effective immediately, the rate will increase 4 cents, to 16 cents per ton. This increase is expected to produce $300,000 in new revenue.

The government estimates that it will collect a total of $1.2 million in gypsum tax for 2002-03.

Tax Extension

• Large Corporations Tax: Extended to March 31, 2004

In October 2001, Finance Minister Neil LeBlanc advised the business community that the Large Corporations Tax, which was set to expire this year, would continue for at least one more year.

The province currently collects approximately $42.6 million from about 1,040 companies paying the Large Corporations Tax. The tax rate will not change, but the tax is further extended to March 31, 2004. The capital tax was first applied six years ago to offset the gains accruing to businesses after the introduction of the HST.

NOTE: For further 2002-03 budget information, visit the Department of Finance Web site at www.gov.ns.ca/finance .