Modernization and Tax Changes Act

Summary#

This bill is the government’s 2025 “housekeeping” law. It updates several provincial laws on taxes, bridges, housing, entertainment licensing, pensions, and more. The goal is to modernize rules, align with federal programs, and adjust some taxes and oversight powers.

Key changes include:

• Allows electronic signatures on beneficiary forms for savings plans, including first home savings accounts.
• Replaces the old film/theatre law with a new Entertainment Licensing and Classification Act for movies, video games, and other entertainment.
• Shifts oversight of the Halifax–Dartmouth Bridge Commission from an independent board to the Minister of Public Works; unpaid toll debts still stand.
• Extends provincial housing powers in Halifax to speed building approvals.
• Updates personal and family tax credits for 2025, lowers the small‑business corporate tax rate to 1.5% and raises the small‑business limit to $700,000.
• Brings a 10% deed transfer tax on non‑resident home purchases starting April 1, 2025, and strengthens collection with property liens.
• Implements an international treaty to help recover child and spousal support across borders.

What it means for you#

• Beneficiaries and savers

  • You can use an electronic signature to name or change a beneficiary on a savings plan (including a first home savings account). This also covers past designations made electronically.

• Moviegoers, gamers, and entertainment businesses

  • A new system will classify and license entertainment (like movies and video games). An Administrator can approve, re‑classify, or prohibit content, and can order short closures for safety or legal reasons. There are clear appeal routes and higher fines for serious violations.

• Drivers and bridge users in Halifax

  • The Minister of Public Works, not the independent utilities board, will oversee the Bridge Commission. Rules allow the Commission to work on other approved transportation projects. Any unpaid bridge tolls as of April 1, 2025, are still owed unless the Commission waives them.

• Halifax residents and builders

  • Temporary provincial powers that speed up housing approvals in Halifax are extended until at least November 9, 2025. Separate housing changes from 2022 continue until November 25, 2026.

• Non‑resident homebuyers

  • From April 1, 2025, a 10% deed transfer tax applies when non‑residents buy residential property (based on the higher of the sale price or assessed value, and the buyer’s share). If this tax isn’t paid, the Province can register a lien on the property that ranks ahead of most other claims except municipal taxes.

• Individual income taxpayers (starting with 2025 tax year)

  • New set amounts for provincial non‑refundable credits:
    • Basic personal amount: $11,744.
    • Spousal/eligible dependant amount: $12,618 (reduced by your spouse/dependant’s income, but not below a small minimum).
    • Infirm dependant (18+): $8,744 (reduced by the dependant’s income and a set minimum).
    • Age amount (65+): $5,734, reduced as income rises.
  • The provincial pension income credit is tied more closely to the federal amount.
  • Some tax amounts will be indexed to inflation starting in 2026; cabinet can set the index factor by order.

• Small businesses and incorporated professionals

  • Provincial small‑business corporate income tax rate drops to 1.5% on April 1, 2025.
  • The provincial small‑business limit increases to $700,000 on April 1, 2025.
  • The dividend tax credit and “income splitting” (split‑income) rules are updated; split income will be taxed at the highest provincial rate.

• Parents seeking child or spousal support across borders

  • Nova Scotia implements the 2007 Hague Convention. It will be easier to recognize, enforce, and collect child and spousal support orders between Nova Scotia and other participating countries. A “Central Authority” will help process applications; you usually won’t need to appear in person.

• Public servants in the pension plan

  • Contribution rates can adjust in step with changes to how fast benefits are earned, without counting as a full plan change.

Expenses#

Estimated net impact: mixed—some measures reduce provincial tax revenue, while others increase it; administration costs are likely moderate.

• Likely lower revenue: reduced small‑business tax rate and higher small‑business limit; some updated personal credits.
• Likely higher revenue: 10% deed transfer tax on non‑resident buyers; delaying full inflation indexing to 2026; taxing split income at the highest rate; adjusted dividend credit formula.
• Administration: new entertainment licensing system and international support enforcement will have operating costs, partly offset by fees; bridge governance changes have minimal direct cost.

Proponents' View#

• Modernizes outdated laws (film and amusements, beneficiary rules) and aligns terms with federal programs like the first home savings account.
• Speeds housing delivery in Halifax by keeping temporary provincial tools in place during a tight housing market.
• Strengthens fairness in family support by making it easier to enforce child and spousal support across borders.
• Streamlines bridge governance and lets the Commission focus on maintaining bridges and other approved transport projects.
• Makes the tax system clearer by setting credit amounts, tying some credits to federal rules, and starting inflation indexing in 2026.
• Helps small businesses grow and hire by cutting the small‑business tax rate and expanding the lower‑rate threshold.
• Deters speculative buying by non‑residents and raises funds for public services through a clear 10% transfer tax, with stronger collection tools.

Opponents' View#

• Removing independent utilities board oversight from the Bridge Commission could reduce transparency and public input on tolls and fees.
• Extending provincial housing powers in Halifax may sideline local planning and public consultation.
• The 10% non‑resident deed transfer tax may discourage newcomers, reduce real‑estate activity, or create title risks if liens are missed.
• The Entertainment Act gives wide powers to classify or shut down events; fines and closure orders could be seen as heavy‑handed.
• Delaying full inflation indexing to 2026 can mean higher real taxes for some people in 2025; changes to dividend and split‑income rules may raise taxes on families with private corporations.
• Cutting small‑business taxes reduces provincial revenue that could fund services, without guaranteeing job growth.