Newfoundland and Labrador Budget 2026

Notably, the budget includes measures to reduce the small business corporate tax rate, increase the basic personal amount, and permanently reduce the gas tax.

The province’s deficit for the 2025-26 fiscal year is estimated at $729 million compared to the $372 million deficit projected in the previous budget. The increase includes the impact of changes to the accounting treatment of Tobacco Settlement revenue and associated legal expenses.

Fiscal projections for the next five years are as follows:

Business tax measures

Corporate tax rates

NL Budget 2026 reduces the provincial small business tax rate to 2% (from 2.5%) effective January 1, 2026. The budget schedules further reductions to 1.5% on January 1, 2027 and then to 1% on January 1, 2028. 

The small business tax rate applies to active business income earned in the province, up to the small business limit which remains at $500,000.  

Combined federal and provincial corporate tax rates 2026

Personal tax measures

Personal income tax rates

NL Budget 2026 proposes to increase the provincial basic personal amount to $15,000 (from $11,188). No changes are proposed to the provincial personal tax rates. The indexed personal tax brackets and the respective marginal tax rates for 2026 are as follows:

The top combined federal and provincial marginal tax rates for 2026 are as follows:

Seniors’ Benefit 

The province’s seniors’ benefit increases by 20% to an annual maximum of $1,861 (from $1,551), effective July 1, 2026. This maximum benefit is available to individuals who are 64 years and older by December 31 of the year and have family net income below a certain threshold. 

Child Benefit

NL Budget 2026 expands eligibility for the provincial child benefit and increases support for current recipients. The province is expected to release further details soon.

Volunteer Firefighter and Search and Rescue Tax Credit

The budget increases the provincial Volunteer Firefighter and Search and Rescue Tax Credit to $6,000 (from $3,000) for eligible volunteers. 

Sales and excise tax measures 

Gas tax

As previously announced, the province proposes to permanently reduce the gas tax to 7.5 cents/litre (from 14.5 cents/litre) on gasoline and 9.5 cents/litre (from 16.5 cents/litre) on diesel on April 1, 2026.

Vehicle registration fees

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

Have questions? Let’s talk. Contact your local advisor or reach out to us here. 

Visit our Budget 2026 hub to learn more about all federal and provincial budgets.

Disclaimer

_{The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice or an opinion provided by Doane Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.}