Budget 2021, which is the province’s second pandemic budget, was highly anticipated as a result of the May 6 release of “The big reset” report. The Report of the Premier’s Economic Recovery team proposed a wide range of tax increases, fee increases and expenditure reductions to address the province’s unsustainable fiscal situation. However, most of the recommendations of “The big reset” report were not reflected in this budget, as the government has instituted a public consultation process to seek feedback on the report’s recommendations. As it stands, Budget 2021 projects a lower-than-anticipated deficit of $826 million for the 2021-22 fiscal year. Part of the deficit reduction is attributable to a forecast increase in oil revenues.
The government anticipates reaching a surplus by 2026-27.
There are no changes proposed to the corporate tax rates or the $500,000 small business limit.
Newfoundland and Labrador’s corporate tax rates for 2021 are summarized as follows:
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