On March 23, 2023, the Honourable Siobhan Coady, Deputy Premier, Minister of Finance, and President of the Treasury Board, presented the 2023 Newfoundland and Labrador budget. Projecting a deficit of $160 million and touting the province’s largest-ever investment in healthcare, this year’s budget focuses primarily on the health and well-being of the province’s residents.
No tax or provincial fee increases are included in this year’s budget. However, the province did announce two commodity tax changes to help address the rising cost of living and a few other measures to provide tax relief to businesses.
Commodity Tax Measures
Elimination of Retail Sales Tax on Home Insurance
This year’s budget includes a proposal to eliminate the Retail Sales Tax (RST) on purchases of home insurance. Other types of insurance that are currently taxable will remain subject to RST. This change will make the temporary relief from RST on home insurance introduced in last year’s budget permanent.
Gasoline Tax Reduction
The province announced an extension to the reduction of 7 cents per litre in the Gasoline Tax that applies to gasoline and diesel fuel. On a basis that includes Harmonized Sales Tax (HST), this creates a tax reduction of 8.05 cents per litre on purchases of qualifying fuels. This tax reduction was introduced in 2022 and will now remain in place until March 31, 2024.
Corporate Tax Measures
Increase to Health and Post-Secondary Education Tax Exemption Threshold
The province has announced that it will increase the exemption threshold for the Health and Post-Secondary Education Tax from $1.3 million to $2 million.
New and Enhanced Tax Credits
The budget also includes specific tax credit measures designed to provide additional tax relief for businesses and encourage investment, including:
- A 10% Manufacturing and Processing Investment Tax Credit for eligible equipment in the manufacturing, fishery, forestry, and farming sectors;
- A Green Technology Tax Credit of 20% of eligible capital expenses related to energy conservation, clean energy generation, and more efficient use of fossil fuels; and
- An increase in the province’s All-Spend Film and Video Production Tax Credit to 40% of total qualified production costs with a maximum credit of $10 million annually per project.
Full details on the new and enhanced tax credits are expected to be released in the coming weeks.
For information on new and extended government funding initiatives included in this year’s provincial budget, please navigate to:
Further details on Newfoundland and Labrador’s 2023 budget may be found on the province’s website at: https://www.gov.nl.ca/budget/2023/
To read key updates from Canada’s 2023 provincial budgets, please navigate to Key Changes | 2023 Canadian Federal and Provincial Budgets.
If you have any questions about how tax changes proposed in recent Canadian budgets might impact your organization, please do not hesitate to contact the Ryan TaxDirect® line at 1.800.667.1600 or email@example.com.