Canada Tax: Newfoundland and Labrador Tax Changes - Budget 2010

Canada Newfoundland and Labrador Finance Minister Tom Marshall tabled the province's fiscal 2010 budget on 29 March 2010. The budget contains several tax measures affecting individuals and corporations, and continues its substantial investments in economic stimulus, health care and education.

The minister anticipates a deficit of $294.9 million for 2009–10, $194.3 million for 2010–11 (based on a projected price of $83 per barrel of oil), $157 million for 2011–12, and $192 million for 2012–13.

Following is a brief summary of the key tax measures.


Business tax measures

Corporate tax rates

The minister proposes for fiscal periods beginning on or after 1 April 2010 to reduce the small business corporate tax rate from 5% to 4%.

Table below summarizes the province's corporate tax rates effective 1 April 2010.

Small business tax rate        General corporate tax rate        Manufacturing and processing income tax rate
               4%                                      14%                                                      5%


Personal tax

Personal income tax rates
The minister proposes to reduce personal tax rates effective 1 July 2010 as outlined in table below.

                                             First bracket rate                Second bracket rate                   Third bracket rate
Pre-budget rate                7.7% on the first $31,061     12.8% on the next $31,060     15.5% on income above $62,121
Proposed rate 2010          7.7% on the first $31,278     12.5% on the next $31,278      13.3% on income above $62,556


Personal tax credits
This budget proposes changes to the following personal tax credits / amounts:
- Effective 1 July 2010, the dividend tax credit rate on eligible dividends will be increased from 9.75% to 11%.
- Effective for the 2010 taxation year, the age amount non-refundable tax credit will increase from $3,681 to $5,000. As a result, the income at which taxpayers will be eligible to receive a benefit from the credit will increase from $51,940 to $60,733.

There was one additional personal tax measure:
- The maximum amount under the low-income seniors' benefit, which will increase from $803 to $900 starting in October 2010.


Other tax measures

Tobacco tax
- Effective 12:01 a.m. on 30 March 2010, the tobacco tax rate increased by one cent per cigarette and by two cents per gram of fine-cut tobacco.