PEI tables budget featuring small business tax reduction - Retail Council of Canada
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 .


  • $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.


  • 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. 


  • 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) 
902 422-4144