Deficit of $152 million forecast for 2024-25, surpluses forecast for
following years until 2028-29.
No new taxes, tax increases, or fee increases
Small
business corporate income tax rate reduced from 3% to 2.5% effective
January 1, 2024. There is no mention of whether the dividend tax credit for
non-eligible dividends will be reduced as a result of this change. As of
December 12, 2024, no additional Bill had been introduced with a change to
the dividend tax credit.
doubling the Physical
Activity Refundable Tax Credit rate from 8.7% to 17.4% to provide a refundable tax credit of up
to $348 per family, effective for the 2023 taxation year
increasing the All Spend Film and Video Production Tax Credit to 40%
Projected deficit for 2021-22 now $400 million, $351 million for
2022-23. The forecast is for a balanced budget in 2026-27.
temporary elimination of 15% retail sales tax on personal property insurance,
such as home insurance, for policies entered into or renewed between April
7, 2022 and April 6, 2023.
no provincial tax or fee increases
Personal Tax Changes
reinstate limitations respecting an individual's ability to claim the
equivalent to spouse amount, the caregiver credit and the infirm dependent
credit
ensure continued availability of the education credit
clarify that the physical activity tax credit may not be claimed by a
person who is exempt from paying tax in the province
see the Bill 54 Explanatory Notes for full details of all changes.
Business Tax Changes
New green technology credit of 20% to help businesses with specific
capital costs for green activities such as equipment for energy conservation
and clean energy generation and efficient use of fossil fuels.
New 10% manufacturing and processing investment tax credit for
manufacturing, fishery, farming and forestry sectors to invest in capital
equipment.
New 30% All Spend Film and Video Production Tax Credit which will apply to
total qualified production costs with a maximum tax credit of $10 million
annually per project.
increases eligible dividend tax credit rate from 5.4% to 6.3%
reduces non-eligible dividend tax credit rate from 3.5% to 3.2%
Tax Changes
Personal income tax increases for 2022 for taxable
incomes greater than $135,973, with the introduction of 3 new tax brackets
for taxable income over $250,000. The highest tax rate will be 21.8% (was
17.3%) for taxable income over $1 million, bringing the highest combined
federal/NL rate to $54.8%. 2022 Tax brackets/rates (before indexing):
Indexed starting 2022:
over $135,973 up to $190,363 - 17.8%
over $190,363 up to $250,000 - 19.8%
Indexed starting 2023:
over $250,000 up to $500,000 - 20.8%
over $500,000 up to $1 million - 21.3%
over $1 million - 21.8%
Physical Activity Tax Credit will provide a refundable tax credit of up to
$2,000 per family - effective January 1, 2021.
20 cent per litre sugar sweetened beverage tax to be implemented April 1,
2022.
3 cent increase per cigarette and 6 cent per gram increase on fine cut
tobacco. Rebate rate for Labrador Border Zones will increase by 3 cents for
cigarettes and 6 cents per gram for fine cut tobacco.
Electric Vehicle Adoption Accelerator program, to provide a $2,500 rebate
to consumers for the purchase of electric vehicles.
- Ensure that split income is included in the net income
amount used to compute the age amount tax credit. This provision also sets
the indexed 2020 age amount and threshold as the new base amount to be indexed
in subsequent years.
- Extend pension tax credit eligibility to retirement
income security benefits or income replacement benefits paid under Part 2 of the
Veterans Well-being Act (Canada).
- Restrict the child care tax credit, volunteer
firefighters' tax credit and search and rescue tax credit to individuals who
were resident in the province at the end of the taxation year
- Amend the foreign tax credit rate to be consistent with
the change in the general income tax rate for corporations.
- New Search and Rescue Volunteer Tax Credit, in the
amount of $3,000 x the lowest tax rate, effective for 2019 and later years
- The retail sales tax on auto insurance will be reduced over
4 years, with the tax being reduced by 2% for 2019 and 1% each in 2020, 2021 and
2022.
- Exemption threshold for the provincial payroll tax is being
increased from $1.2 million to $1.3 million, effective January 1, 2019.
- No new taxes or fees
- 75% of the temporary gas tax introduced in Budget 2016 will
be eliminated in 2017. On June 1, 2017, gas tax will be reduced by 8.5
cents per litre, with a further 4 cents per litre reduction on December 1, 2017.
- The NL Income Supplement and Seniors' Benefit will be
maintained through a $120 million investment.
The Newfoundland and Labrador Income Supplement will be paid to
eligible low income seniors, individuals, families and persons with
disabilities, with eligibility based on family net income.
Eligible recipients will receive their first payment, consisting of two
quarterly payments, in October 2016. This replaces the previous NL
HST credit.
Effective July 1, 2016, HST will increase from 13% to 15%.
The Retail Sales Tax on insurance premiums is being re-introduced at a
rate of 15%.
The Insurance Companies tax will increase by 1 percentage point to 5%.
A Deficit Reduction Levy of up to $900 annually, depending on taxable
income, will be implemented, but individuals with taxable income of
$20,000 or less will be exempt
- this was revised to a maximum
of $1,800 annually, but exempt for taxable income of $50,000 or
less, as per an announcement
by the NL government on May 25, 2016. The budget indicated
that his is a temporary tax which will
be phased out over 3 years beginning in 2018. However, Bill
14, passed June 7, 2016, provides for the levy to be in effect
for the 2016 to 2019 taxation years.
Other taxation changes:
Effective April 15, 2016, the tobacco tax on cigarettes increases by
one cent per cigarette, and on fine-cut tobacco increases by two cents
per gram.
Retroactive to January 1, 2016, the general
corporate income tax rate will increase 1% to 15%, and the Manufacturing and
Processing Profits Tax Credit is eliminated. See Bill
15 passed June 7, 2016.
Effective January 1, 2016, the Financial Corporations Capital Tax Rate increases 1%.
Effective June 2, 2016, gasoline tax will temporarily increase by 16.5
cents per litre. The tax rate on diesel products will increase by
5 cents per litre, and on aviation fuel will increase by 1.8 cents per
litre.
14.3% for taxable income over $125,000 and up to $175,000. The effective 2015
rate is 13.8%, the average for the year.
15.3% for taxable income over $175,000. The effective 2015
rate is 14.3%, the average for the year.
Note that the donations tax credit rate for donations over $200
will be the new highest tax rate, 15.3%.
Effective January 1, 2016, HST will increase from 13% to 15%.
The HST credit will also be enhanced to mitigate the impact on low
income individuals and families, effective with the October 2016
payment. Note: This
increase was cancelled - see the Newfoundland and Labrador Tax
Information Bulletin issued December 14, 2015.
Residential Energy Rebate program ending effective July 1, 2015.
Applications must be received within 36 months after the eligible
product is supplied.
Effective April 1, 2015, Financial Corporations Capital Tax rate is
increased from 4% to 5%.
New Interactive Digital Media Tax Credit effective January 1,
2015: 40% refundable provincial tax credit on eligible wages and
remuneration.
Effective May 1, 2015, tobacco retailers in Labrador West will be
eligible for a rebate of a portion of tobacco tax.
Residential energy rebate of 8% equal to
provincial portion of HST, effective Oct 1, 2011, to be administered
by the province.
Starting 2011, new non-refundable child care tax
credit based on child care expenses currently deductible from
income. The maximum tax credit will be $539 per child, and
will depend on a child's age and the amount of deductible child care
expenses.
New non-refundable Volunteer Firefighters' Tax
Credit, maximum $231 tax credit for firefighters who perform at
least 200 hours of service each year.
Increase in payroll tax exemption threshold to
$1.2 million from $1 million.