Newfoundland and Labrador Provincial Budget Tax Updates 2026

May 13, 2026
2:47 pm

Overview

On April 29, 2026, Newfoundland and Labrador’s Minister of Finance announces Budget 2026: Opportunity for All of Us. This comprehensive summary highlights some of the key changes that will influence the province’s tax environment in the coming years.

Personal Income Tax Measures

Personal income tax rates remain unchanged for 2026. The government will, however, increase the Basic Personal Amount (BPA) to $15,000.[1]

The income tax rates for the 2026 taxation year, based on your taxable income, are as follows:

Taxable income	Rate
$44,678 or less	8.70%
Over $44,678 up to $89,354	14.50%
Over $89,354 up to $159,528	15.80%
Over $159,528 up to $223,340	17.80%
Over $223,340 up to $285,319	19.80%
Over $285,319 up to $570,638	20.80%
Over $570,638 up to $1,141,275	21.30%
Over $1,141,275	21.80%

The current personal combined income tax rates for top marginal tax rates in 2026 are outlined below:

Type of income	Rate
Interest/regular income	54.80%
Capital gains	27.40%
Eligible dividends	46.20%
Non‑eligible dividends	48.96%

Increased Seniors’ Benefit

Effective July 1^st,2026, the government will increase the Newfoundland and Labrador Senior Benefit by 20%.

Expanded Eligibility for the Child Benefit

The Budget also announced it will expand eligibility for the Newfoundland and Labrador Child Benefit to support 3,000 more children and increase payment amounts, though further details have yet to be released.

Volunteer Firefighter and Search and Rescue Tax Credit

The government has announced that it will double the Volunteer Firefighter and Search and Rescue Tax Credit to $6,000.

Corporate Income Tax Measures

The government announced a reduction of the small business tax rate to 2%, effective January 2026, 1.5% starting January 2027, and 1% starting January 2028.

The corporate income tax rates for Newfoundland and Labrador for the upcoming years are as follows:

Provincial Corporate Income Tax Rates
	2026	2027	2028
Small-business tax rate	2.0%	1.5%	1.0%
General manufacturing and processing tax rate	15.0%	15.0%	15.0%
General corporate tax rate	15.0%	15.0%	15.0%

Combined Provincial and Federal Corporate Income Tax Rates[2]
	2026	2027	2028
Small-business tax rate[3]	11.0%	10.5%	10.0%
General manufacturing and processing tax rate	30.0%	30.0%	30.0%
General corporate tax rate	30.0%	30.0%	30.0%

Indirect Tax Measures

Permanent Reduction of the Gas Tax

As previously announced^[4], the Budget proposes to permanently reduce the provincial tax on gasoline to 7.5 cents per litre from 14.5 cents per litre, and the provincial tax on diesel to 9.5 cents per litre from 16.5 cents per litre, effective April 1, 2026.

Other Tax Measures

Extension of the Reduction in Vehicle Registration Fees

The government proposes extending the reduction in registration fees for passenger vehicles, light-weight trucks and taxis by 50 per cent in 2026.

For further information, visit https://www.gov.nl.ca/fin/budget/.

[1] The BPA for 2026 was previously set at $11,188.

[2] Federal corporate income tax rates on qualifying zero-emission technology manufacturing profits are temporarily reduced by 50%, lowering the general rate to 7.5% (from 15%) and the Canadian-controlled private corporations (CCPCs) rate to 4.5% (from 9%), for taxation years from 2022 through 2031. These reduced rates will then be gradually phased out for taxation years beginning in 2032 through 2034.

[3] Applies to the first $500,000 of active taxable income of CCPCs.

[4] Government of Newfoundland and Labrador, “Provincial Government Delivering on Promise of Permanent Reduction of Gas Tax,” News Release, Department of Finance, March 10, 2026.