Coronavirus | Finance & Taxation | Prince Edward Island | Store Operations

PEI tables budget featuring small business tax reduction

March 12, 2021

PEI’s continued confidence in both its economy and its ability to manage the COVID-19 pandemic was demonstrated as it tabled it’s 2020-21 operating budget.  The budget features strategic investments in the economy, families, health care and the environment.  Of note to retailers was the reduction in the small business tax rate to 1 percent.  This reduction will position PEI as having the lowest small business tax rate in Atlantic Canada. 

Background Information

Deficit and Debt:

  • The 2020-21 budget is projecting a deficit of $120 million with a net debt of $2.4 billion.
  • The 2021-22 budget is forecasting a $112 million deficit with the net debt increasing to $2.6 billion. 

Personal Tax Relief:

  • The basic personal exemption will be raised to $11,250.
  • The low-income tax reduction threshold will be increased to $20,0000 .

Families:

  • $2.9 million to implement a universal half-day Pre-Kindergarten Program.
  • Funding to reduce childcare rates to $25 per day starting in January 2022.

Health:

  • Of interest to pharmacies: $1.5 million for a free shingles vaccine for Islanders aged 65 and older.

Stimulus for the economy:

  • A $3 million Tourism Activation Grant Program will be established to provide tourism businesses with non-repayable grants to assist with opening costs for the 2021 tourism season.  
  • Innovation PEI will be launching programs this April which will provide the following: (1) an Innovation Fund to assist businesses refine and commercialize innovative products and services, (2) a strategic improvement fund to help businesses in our strategic sectors access professional expertise around quality assurance, operational efficiency and capacity building; (3) a small business assistance grant that will provide a flexible grant for small businesses needing to access professional services.
  • The COVID-19 web presence program will be made permanent.  This program allows businesses to access $1000 to develop a traditional website and $2500 for an e-commerce website.
  • A $1 million micro-loan program will be established to assist entrepreneurs from under-represented groups in accessing financing. 

Environment:

  • Of interest to home improvement retailers: $5.6 million to support and expand the heat pump rebate program through efficiencyPEI.

COVID-19 Recovery:

  • The government will move to consolidate the various departmental contingency funds into one $50 million fund.  This fund will be able to be used in a more coordinated manner to support economic recovery.

The government press release can be found here.

Jim Cormier

For questions or more information contact

Jim Cormier
Director, Government Relations (Atlantic) 
jcormier@retailcouncil.org 
902-422-4144

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