April 18, 2019
Canada: Newfoundland and Labrador issues budget 2019/20
On 16 April 2019, Newfoundland and Labrador Finance Minister and President of the Treasury Board Tom Osborne tabled the province’s fiscal 2019/20 budget. The budget contains no new taxes and no tax increases.
The Minister anticipates a surplus of CA$1.9 billion1 for 2019/20, and projects a deficit for the following two years. The 2019/20 surplus is primarily a result of the accrual of the guaranteed revenue stream secured by the province, as part of the recently updated Atlantic Accord agreement.
The following is a brief summary of the key tax measures.
Business tax measures
Corporate tax rates
No changes are proposed to the corporate tax rates or the $500,000 small-business limit.
Newfoundland and Labrador’s 2019 corporate tax rates are summarized in Table A.
Table A – Newfoundland and Labrador’s corporate tax rates
* The small-business rate is based on a 31 December year-end.
** The federal small-business rate was reduced from 10.0% to 9.0% effective 1 January 2019.
Other business tax measures
The Newfoundland and Labrador Film and Video Industry Tax Credit was renewed until 2021.
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2019 Newfoundland and Labrador personal tax rates are summarized in Table B.
Table B – Newfoundland and Labrador personal tax rates 2019
For taxable income in excess of $147,667, the 2019 combined federal-Newfoundland and Labrador personal income tax rates are outlined in Table C.
Table C – Combined federal Newfoundland and Labrador personal 2019 tax rates
* The rate on capital gains is one-half the ordinary income tax rate.
Personal tax credits
Other tax measures
Retail sales tax
The Government is eliminating the current retail sales tax (RST) on automobile insurance. This change will be implemented by early July and will be retroactive to 16 April 2019. Those who renew their insurance between now and July will receive a rebate for the RST payment on their insurance.
1. Currency references in this Alert are to CA$.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), St. John’s