On April 6, 2017, Newfoundland and Labrador Finance Minister Cathy Bennett tabled the province's 2017-18 budget.

The budget forecasts a deficit of $1.1 billion for the 2016-2017 fiscal year, which is down from the original forecast of $1.83 billion announced in last year's budget. The decrease in the deficit is due to a decrease in expenditures as well as an improvement in revenues. The government is also anticipating a deficit of $778 million for 2017-18 and is expected to be on track to return to a surplus in 2022-23.

As communicated in last year's budget, the government is committed to ensuring tax increases are balanced with tax competitiveness. As such, the government will initiate a comprehensive independent review of the tax system this fiscal year and will be completed within the government's current mandate.

The following is a summary of the tax measures in the budget.

Business tax measures

There are no changes proposed to the corporate tax rates or the $500,000 small business limit.

The 2017 tax rates are summarized in Table A:

Code:

Personal tax measures

There are no changes to the personal income tax rates.

The 2017 Newfoundland and Labrador personal tax rates, which were announced in the 2016 budget, are summarized in Table B.

The combined federal and Newfoundland top marginal tax rate (i.e., for taxable income in excess of $202,800) on various types of income for 2017 is summarized in Table C.

Other measures

Gasoline tax

The budget announced that the temporary increase in the gasoline tax will be reduced by a total of 12.5 cents per litre by the end of the calendar year. This reduction will be carried out in two steps: beginning on June 1, 2017, the gasoline tax will be decreased by 8.5 cents per litre, and on December 1, 2017, the gasoline tax will be decreased by another 4 cents per litre. Any further reduction to the gasoline tax after this time will be reviewed as part of the 2017 fall fiscal and economic update.

Consistent with the phase-out of the temporary gasoline tax, the rebate for the Labrador Border Zones, which was set at 10 cents per litre last year, will be reduced to 1.5 cents per litre on June 1, 2017 and will be discontinued as of December 1, 2017.

There will be no change to the tax rate on diesel fuel.

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