April 3, 2023
Canada: Newfoundland and Labrador issues budget 2023/24
On 23 March 2023, Newfoundland and Labrador Deputy Premier and Minister of Finance Siobhan Coady tabled the province’s fiscal 2023/24 budget. The budget contains tax measures affecting individuals and corporations.
The Minister anticipates a surplus of CA$784 millioni for 2022/23 compared to the original estimated deficit of $351 million. The Minister projects a deficit of $160 million for 2023/24 followed by a return to surplus for the next four years.
A brief summary of the key tax measures follows.
Business tax measures
Corporate income tax rates
No changes are proposed to the corporate income tax rates or the $500,000 small-business limit.
Newfoundland and Labrador’s 2023 corporate income tax rates are summarized in Table A.
Table A – 2023 Newfoundland and Labrador (NL) corporate income tax rates1
1 The rates represent calendar-year-end rates unless otherwise indicated.
2 The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate. These reductions are not reflected in the combined federal and Newfoundland and Labrador rates above.
3 An additional tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a $100-million exemption to be shared by group members), effective for tax years ending after 7 April 2022 (prorated for tax years straddling this effective date).
Other business tax measures
This budget proposes to increase the All-Spend Film and Video Production tax credit from 30% to 40%.
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2023 Newfoundland and Labrador personal income tax rates are summarized in Table B.
Table B – 2023 Newfoundland and Labrador personal income tax rates
1 Individuals resident in Newfoundland and Labrador on 31 December 2023 with taxable income up to $21,141 pay no provincial income tax due to a low-income tax reduction. The low-income tax reduction is clawed back for income exceeding $22,447 until the reduction is eliminated, resulting in an additional 16% of provincial tax on income between $22,448 and $28,297.
For taxable income exceeding $264,750, the 2023 combined federal-Newfoundland and Labrador personal income tax rates are outlined in Table C.
Table C – Combined 2023 federal and Newfoundland and Labrador personal income tax rates
1 The rate on capital gains is one-half the ordinary income tax rate.
Personal tax credits
This budget proposes to double the Newfoundland and Labrador Physical Activity tax credit, which will provide a refundable tax credit of up to $348 per family.
Other tax measures
Provincial tax measures
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), St. John’s