The Canadian province of Prince Edward Island presented the 2025-26 Operating Budget to the legislative assembly on 10 April 2025.
The province’s 2025-26 budget includes CAD 294.6 million in new spending, bringing total expenditure to over CAD 3.5 billion—a 9.1% increase from last year. Revenues are expected to grow by CAD 195.7 million, or 6.2%, over last year. The projected deficit for 2025-26, before the tariff and trade contingency, is CAD 151.9 million, which includes the CAD 32 million Tariff and Trade Contingency Fund; the deficit will be CAD 183.9 million.
The main tax measures of the 2025-26 budget are as follows:
Corporate tax rates
One of the key measures in this budget is the reduction of the corporate income tax rate from 16% to 15% (30% combined with the federal rate), which will go into effect on 1 July 2025.
Small business threshold
The small business threshold will rise from CAD 500,000 to CAD 600,000, while the small business rate remains at 1% (10% combined). These changes take effect on 1 July 2025.
Property tax rates
The property transfer tax for properties worth CAD 1 million or more will rise to 2% on 28 April 2025. First-time homebuyers in Prince Edward Island will also see the rate increase to 2%.
Personal income tax rates
For individuals, the basic personal amount will increase to CAD 14,650 in 2025 and to CAD 15,000 in 2026, with a 1.8% rise in all five tax brackets.
