BILL 46

An Act to Amend the New Brunswick Income Tax Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Section 14 of the New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is repealed and the following is substituted:

14(1) For the 2009 taxation year, the tax payable under this Part for a taxation year by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, referred to in this Division as the “amount taxable”, is:

(a)  9.65% of the amount taxable if the amount taxable does not exceed $35,707;

(b)  $3,446 plus 14.50% of the amount by which the amount taxable exceeds $35,707 and does not exceed $71,415;

(c)  $8,623 plus 16% of the amount by which the amount taxable exceeds $71,415 and does not exceed $116,105; and

(d)  $15,774 plus 17% of the amount by which the amount taxable exceeds $116,105.

14(2) Subject to subsection (5), for the 2010 taxation year, the tax payable under this Part for a taxation year by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, referred to in this Division as the “amount taxable”, is the sum of the following:

(a)  9.30% of the portion of the amount taxable that is less than or equal to $36,421;

(b)  12.50% of the amount by which the amount taxable exceeds $36,421 and does not exceed $72,843;

(c)  13.30% of the amount by which the amount taxable exceeds $72,843 and does not exceed $118,427; and

(d)  14.30% of the amount by which the amount taxable exceeds $118,427.

14(3) Subject to subsection (5), for the 2011 taxation year, the tax payable under this Part for a taxation year by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, referred to in this Division as the “amount taxable”, is the sum of the following:

(a)  9.10% of the portion of the amount taxable that is less than or equal to $37,150;

(b)  12.10% of the amount by which the amount taxable exceeds $37,150 and does not exceed $74,300;

(c)  12.40% of the amount by which the amount taxable exceeds $74,300 and does not exceed $120,796; and

(d)  12.70% of the amount by which the amount taxable exceeds $120,796.

14(4) Subject to subsection (5), for the 2012 taxation year and subsequent taxation years, the tax payable under this Part for a taxation year by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, referred to in this Division as the “amount taxable”, is the sum of the following:

(a)  9% of the portion of the amount taxable that is less than or equal to $37,893; and

(b)  12% of the amount by which the amount taxable exceeds $37,893.

14(5) If the adjusted amounts calculated under subsection 16.1(2) for the 2010, 2011 or 2012 taxation year are greater than the amounts expressed in dollars that are referred to in subsection (2), (3) or (4), as the case may be, then the adjusted amounts shall be used for the purpose of computing the tax payable by an individual for the 2010, 2011 or 2012 taxation year instead of the amounts referred to in subsection (2), (3) or (4).

2 Section 16.1 of the Act is amended

(a)  by adding after subsection (1.2) the following:

16.1(1.3) This section does not apply to subsection 14(1) and sections 26 and 49.1 for the 2009 taxation year.

(b)  by adding after subsection (2) the following:

16.1(2.1) For the purpose of calculating an adjusted amount under subsection (2) that is to be used under the relevant provisions for the 2010, 2011 or 2012 taxation year, if the formula in subparagraph (2)(b)(ii) produces a percentage that is less than 2% for the applicable taxation year, then the percentage to be used under that subparagraph shall be read as 2% for the applicable taxation year.

3 Subsection 26(1) of the Act is repealed and the following is substituted:

26(1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, if the individual is entitled to a deduction under subsection 118.2(1) of the Federal Act for the year, there may be deducted an amount determined by the formula

A × [(B – C) + D]

where

A is the appropriate percentage for the year;

B is the amount that is determined in the formula in subsection 118.2(1) of the Federal Act for B in computing the individual’s tax payable under Part I of the Federal Act for the year;

C is the lesser of $1,947 and 3% of the individual’s income for the year; and

D is the amount that would be determined in the formula in subsection 118.2(1) of the Federal Act for D in computing the individual’s deduction under that subsection for the year if the reference to “$1,813” in the description of F is read as a reference to “$1,947”.

4 Section 49.1 of the Act is amended

(a)  in subsection (2)

(i) in paragraph (a) by striking out “$11,000” and substituting “$14,361”;

(ii) in paragraph (d)

(A) in the portion preceding subparagraph (i) by striking out “5%” and substituting “4%”;

(B) in subparagraph (ii) by striking out “$11,000” and substituting “$14,361”;

(b)  by adding after subsection (2) the following:

49.1(2.01) Effective January 1, 2010, the reference to “4%” in subsection (2) shall be read as a reference to “3%”.

(c)  by repealing subsection (2.1);

(d)  by repealing subsection (2.2).

5 Section 50 of the Act is amended

(a)  in subsection (2)

(i) in paragraph (a) by striking out “$750” and substituting “$2,000”;

(ii) in paragraph (b) in the portion preceding subparagraph (i) by striking out “15%” and substituting “20%”;

(b)  by adding after subsection (2.3) the following:

50(2.4) A registered labour-sponsored venture capital corporation shall meet the prescribed investment requirements.

50(2.5) The Minister of Finance of New Brunswick may extend, with or without conditions, the time limit for meeting the prescribed investment requirements and may grant the extension even though the time limit to be extended has expired.

50(2.6) The Minister of Finance of New Brunswick may impose a penalty on a registered labour-sponsored venture capital corporation that fails to meet the prescribed investment requirements.

6 Part I of the Act is amended in Division B by repealing Subdivision j.1.

7 Section 52 of the Act is amended

(a)  in subsection (1) in the portion preceding paragraph (a) by striking out “$200” and substituting “$300”;

(b)  by adding after subsection (1) the following:

52(1.1) Effective January 1, 2010, the reference to “$300” in subsection (1) shall be read as a reference to “$400”.

8 Section 55 of the Act is amended by adding after subsection (2) the following:

55(2.1) Effective July 1, 2009, the tax payable by a corporation under this Part for a taxation year is 12% of the corporation’s taxable income earned in the year in New Brunswick.

55(2.2) Effective July 1, 2010, the tax payable by a corporation under this Part for a taxation year is 11% of the corporation’s taxable income earned in the year in New Brunswick.

55(2.3) Effective July 1, 2011, the tax payable by a corporation under this Part for a taxation year is 10% of the corporation’s taxable income earned in the year in New Brunswick.

55(2.4) Effective July 1, 2012, the tax payable by a corporation under this Part for a taxation year is 8% of the corporation’s taxable income earned in the year in New Brunswick.

9 Section 56 of the Act is amended by adding after subsection (4) the following:

56(4.1) Effective July 1, 2009, the reference to “14.5%” in subsection (1) shall be read as a reference to “12%”.

56(4.2) Effective July 1, 2010, the reference to “14.5%” in subsection (1) shall be read as a reference to “11%”.

56(4.3) Effective July 1, 2011, the reference to “14.5%” in subsection (1) shall be read as a reference to “10%”.

56(4.4) Effective July 1, 2012, the reference to “14.5%” in subsection (1) shall be read as a reference to “8%”.

10 Section 57 of the Act is amended

(a)  in subsection (1.1)

(i) in paragraph (f) by striking out “and” at the end of the paragraph;

(ii) in paragraph (g) by striking out the period at the end of the paragraph and substituting “, and ending on December 31, 2008, and”;

(iii) by adding after paragraph (g) the following:

(h)  for the first amount, “$500,000” and, for the second amount, “$1,370” for the period commencing on January 1, 2009.

(b)  in subsection (2.4) by adding “, and ending on December 31, 2008” after “January 1, 2007”;

(c)  by adding after subsection (2.4) the following:

57(2.5) The business limit otherwise determined under section 125 of the Federal Act shall be deemed for the purposes of subsection (1) to be $500,000 for the period commencing on January 1, 2009.

11 Subsection 119(2.1) of the Act is amended by striking out “51.1 or ”.

12 Subsection 124(1) of the Act is amended

(a)  by adding after paragraph (b) the following:

(b.01)  respecting the penalty referred to in subsection 50(2.6), including the amount of the penalty, the time limit for paying the penalty, interest on the penalty and a refund of the penalty;

(b)  by repealing paragraph (b.1).

CONSEQUENTIAL AMENDMENT

13 New Brunswick Regulation 2007-47 under the New Brunswick Income Tax Act is repealed.

COMMENCEMENT

14(1) Sections 1 to 4, 7 and 10 of this Act shall be deemed to have come into force on January 1, 2009.

14(2) Sections 5, 6 and 11 to 13 of this Act shall be deemed to have come into force on March 17, 2009.

Chapter Outline Update

9

Strike out the entry for s.51.1 and substitute the following:

Repealed51.1