The Honourable Siobhán Coady, Deputy Premier and Minister of Finance, presented the Newfoundland and Labrador budget on September 30, 2020. The “Today. Tomorrow. Together.” budget focuses on the province’s investments and managing spending, and projects in a deficit of $1.84 billion.
While no increases to personal or corporate income taxes were announced, several interesting commodity tax changes were introduced, as noted below.
Gasoline and Carbon Tax
The tax applicable to gasoline and diesel will be increased. The government indicated that if the province does not comply with the federally mandated carbon tax increase, then the federal backstop could be implemented in Newfoundland and Labrador. To partially offset the required carbon tax increase, the provincial portion of the tax on gasoline will be reduced by two cents per litre. The net impact of these changes will cause the prices for gasoline and diesel to increase by 0.21 cents per litre and 2.68 cents per litre, respectively, effective October 1, 2020.
To help deter the use of vaping products, the government is introducing a 20% tax on vaping products. The tax on tobacco products will also increase by an additional five cents for each cigarette and an additional 10 cents per gram of fine-cut tobacco.
Further information on Newfoundland and Labrador’s 2020 budget may be found on the province’s website at: Newfoundland and Labrador Budget 2020
If you have any questions about how these proposed changes might impact your organization, please do not hesitate to call the Ryan TaxDirectTM line at 1.800.667.1600.