On 29 April 2026, Newfoundland and Labrador Finance Minister Craig Pardy (the Minister) tabled the province's fiscal 2026 budget. The budget contains tax measures affecting individuals and corporations, including a reduction in the small-business corporate income tax rate by 0.5% for each of the next three years.

The Minister revised the 2025-26 deficit projection of the previous government from CA$372m to CA$729m. The minister further anticipates a deficit of CA$689m for 2026-27 and projects deficits for each of the following four years up to and including 2030-31.

Following is a brief summary of the key tax measures.

Business tax measures

Corporate income tax rates

No changes are proposed to the general corporate income tax rates or the CA$500,000 small-business limit. However, the small-business corporate income tax rate will be reduced by 0.5% to 2.0% retroactive to 1 January 2026, and further reduced to 1.5% on 1 January 2027 and to 1% on 1 January 2028.

Newfoundland and Labrador's (NL) 2026, 2027 and 2028 corporate income tax rates are summarized in Table A.

Table A — 2026 to 2028 Newfoundland and Labrador 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 federal tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a CA$100m exemption to be shared by group members).

⁴ 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.

Personal tax

Personal income tax rates

The budget does not include any changes to personal income tax rates.

The 2026 Newfoundland and Labrador personal income tax rates are summarized in Table B.

Table B — 2026 Newfoundland and Labrador personal income tax rates

¹ Individuals resident in Newfoundland and Labrador on 31 December 2026 with taxable income up to CA$22,774 pay no provincial income tax as a result of a low-income tax reduction. The low-income tax reduction is clawed back for income exceeding CA$24,191 until the reduction is eliminated, resulting in an additional 16% of provincial tax on income between CA$24,192 and CA$30,491.

For taxable income exceeding CA$285,319, the 2026 combined federal-Newfoundland and Labrador personal income tax rates are outlined in Table C.

Table C — Combined 2026 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 changes to the following personal credits/amounts:

• The basic personal amount will increase from CA$11,188 to CA$15,000.
• The volunteer-firefighter and the search-and-rescue tax credits will increase from CAC$3,000 to CA$6,000.

The budget also proposes to increase the seniors' benefit by 20% effective 1 July 2026.

Other tax measures

Gas tax

The budget proposes to permanently reduce the gas tax to 7.5 cents per liter on gasoline and 9.5 cents per liter on diesel.

Sugar tax

The government intends to repeal the sugar tax.

For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.