Tax Highlights from the 2026 Newfoundland and Labrador Budget

Minister of Finance Craig Pardy tabled the 2026/27 Newfoundland and Labrador provincial budget on April 29, 2026.

The budget projects a deficit of $688 million for the 2026/27 fiscal year, and $1.1 billion for 2027/28 and 2028/29. The forecasted deficit for the 2025/26 fiscal year now stands at $729 million, compared to the previously projected deficit of $372 million. The province’s net debt is projected to reach $20.8 billion this year.

On the income tax front, the budget reduces the small business corporate tax rate by 0.5% annually over the next three years. It also increases the Basic Personal Amount to $15,000, doubles the volunteer firefighter and search and rescue tax credits and permanently reduces the gas tax.

The following pages summarize the changes announced in the budget. Please note that these changes remain proposals until they are passed into law by the provincial government.

Personal Tax Matters

Personal Income Tax Rates and Tax Brackets

There are no proposed changes to personal income tax rates. However, tax brackets and other amounts have been indexed by 1.1% to account for inflation. The table below outlines the province’s tax rates and tax brackets for 2026.

The table below outlines the 2026 combined federal and provincial highest marginal tax rates for various types of income.

Basic Personal Amount (BPA)

The budget increases the Basic Personal Amount from $11,188 to $15,000.

Volunteer firefighter and search and rescue tax credits

The budget proposes to double the volunteer firefighter and search and rescue tax credits to $6,000 to match the federal credit amount.

Newfoundland and Labrador Seniors’ Benefit (NLSB)

The budget increases the Newfoundland and Labrador Seniors’ Benefit by 20%, effective July 1, 2026.

Corporate Tax Matters

Corporate Income Tax Rates

The budget reduces the small business tax rate to 2% effective January 1, 2026, to 1.5% effective January 1, 2027, and to 1% effective January 1, 2028. The table below outlines the province’s corporate tax rates and small business limit for 2026.

The table below outlines the 2026 combined federal and provincial corporate income tax rates for various types of income earned by a Canadian Controlled Private Corporation (CCPC).

Other Initiatives

Gas Tax

As previously announced, the province proposes to permanently reduce the gas tax to 7.5 cents per litre on gasoline and 9.5 cents per litre on diesel, effective April 1, 2026.

Newfoundland and Labrador Child Benefit (NLCB)

The budget expands eligibility for the Newfoundland and Labrador Child Benefit and increases support for current recipients.

Vehicle Registration Fees

The budget reduces vehicle registration fees by 50% for passenger vehicles, light-weight trucks, and taxis in 2026.

Next Steps

For tailored tax and legal advice on how these measures affect you or your business, your own tax lawyers and accountants are best positioned to advise on these proposals. Your financial advisor can also assess the impact of these proposals on your personal finances or business affairs and show you ways to take advantage of their benefits or ease their impact, align your investments accordingly, and help coordinate the right specialist for your circumstances.