The Honourable Cathy Bennett, Minister of Finance and President of the Treasury Board, presented the Newfoundland and Labrador budget on April 6, 2017. This year’s “Realizing Our Potential” budget indicates the province will exceed its fiscal targets for 2016-17, which has been achieved by lowering spending, justifying expenditures on an annual basis, and creating a more modern and effective public service. As part of the budget, the province announced that it is on track to meet its deficit reduction target and will return to a surplus in 2022-23.
This year’s budget does not include the introduction of any new taxes or increases to taxes and fees. However, the budget did contain one commodity tax measure, which is summarized below.
Temporary Gas Tax Reduction
Effective June 1, 2017, the temporary gas tax will be reduced by 8.5 cents per litre and, effective December 1, 2017, this tax will reduced by an additional 4 cents per litre. These two reductions, when combined, will result in a total decrease in the temporary gas tax of 12.5 cents per litre, or a 75% reduction, by the end 2017. The province has also committed to reviewing the 4 cents per litre temporary gas tax that will remain in place after the reductions as part of its 2017 fall fiscal and economic update.
The areas of Labrador West (Labrador City and Wabush) and Southern Labrador (from the Quebec border to and including the community of Red Bay) are referred to as the Labrador Border Zones. A rebate of the temporary gas tax in these zones was scheduled to be phased out, and was reduced to 10 cents per litre last year. Effective June 1, 2017, the rebate for these zones will be reduced to 1.5 cents per litre, and on December 1, 2017, the rebate will be eliminated.
The temporary gas tax that is in place on the north coast of Labrador will continue to be reduced, such that the price per litre of gas does not exceed $1.55 or the temporary gas tax is fully reduced.
There will be no changes to the tax rate on diesel fuel.
Additional information on the 2017 Newfoundland and Labrador budget is available on the province’s web site at: