News release

2006-07 Budget Highlights

Finance (to Oct. 2013)

The 2006-07 budget is the fifth straight balanced budget, with a surplus of $71.9 million. Capital spending will increase to $383 million. Significant new dollars are allocated to energy cost relief and energy conservation.

TAX CHANGES

Personal Income Tax Four-year plan to provide increasing income tax relief by raising the basic personal exemption and value of all non-refundable tax credits
Step 1. Starting in 2007, basic personal exemption to increase $250 annually for the next four years. Starting in 2007, non-refundable tax credits will increase proportionately by the same increase over this period.
Step 2. Starting in 2011, full indexation will be implemented.

Harmonized Sales Tax

  • Household Energy Rebate of the provincial portion of the HST
  • Commencing Jan. 1, 2007
  • Applied to electricity, home heating fuel, natural gas, wood, and other fuel sources used to heat homes

Healthy Living Tax Credit

  • $150 tax credit introduced last year will be increased to $500 per child

Graduate Tax Credit

  • $1,000 tax credit for post-secondary graduates to offset Nova Scotia income taxes; upon graduation, students will have three years within which to use the credit.

Child Care Benefit Tax Credit

  • Tax credit to be applied against the full value of the new $1,200 federal Universal Child Care Benefit
  • Revenue neutral to the province

Tax Rate on Used Motor Vehicles

  • Current rate on used motor vehicles will be adjusted downward to 14 per cent effective July 1, 2006, to correspond with a 1 per cent decrease in the federal GST rate

Large Corporations Capital Tax

  • Rate decrease from 0.275 per cent to 0.25 per cent
  • Complete elimination of tax by July 1, 2012

Small Business Tax Threshold

  • Threshold will increase from $350,000 to $400,000 Energy Efficiency Tax Credit
  • Non-refundable tax credit equal to 25 per cent on eligible capital investments on renewable energy sources or energy efficiency investments made by the corporation up to 50 per cent of the large corporations capital tax payable in a given year

Biodiesel Incentive

  • Effective July 1, 2006, the motive fuel tax rate is removed on the biodiesel component of the motive fuel blend

Liquor Licence Levy

  • Elimination of the 3.5 per cent levy on the purchase of alcoholic products effective Jan. 1, 2007

Capital Spending

  • Total capital spending approximately $383 million
  • TCA: $335 million
  • Capital grants to DHAs: $40 million
  • Capital grants to Crown corporations: $8 million
  • Highway spending increases by $34 million to $176.2 million
  • Capital funding for land and parks increases to $19.5 million
  • Capital funding for IT projects increases to $26.9 million

Departmental Spending Increases

  • Youth, Families and Communities Learning for Life II (Year 2) $20.2 million Low-Income Pharmacare $1.0 million Shelter rate increase $1.9 million

  • Health, Health Promotion and Protection Wait times (Federal) $16.5 million Oncology drugs and specialists $15.9 million Pharmacare for Seniors $12.9 million Continuing Care $16.4 million

  • Economic Development and Infrastructure Community Development Action Plan $250,000 Aquaculture Initiative $450,000 Ferry Portland to Yarmouth $1.25 million Provincial Capital Assistance Program $1.5 million

  • Community Safety Criminal Intelligence Service Nova Scotia $690,000 Legal Aid $700,000 Youth Attendance Centre $450,000 Road safety enhancements $3.75 million

  • Energy and Environment Nova Scotia Hospital Gas Conversion Project $1.2 million Smart Energy Conservation Program $10 million Environmental Home Assessment Program $850,000

Note: For further 2006-07 budget information, see the Department of Finance website at www.gov.ns.ca/finance

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