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2012 Newfoundland and Labrador budget highlights


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Canadian tax alert, April 24, 2012

The Honourable Tom Marshall, Minister of Finance and President of the Treasury Board, presented the 2012 budget this afternoon. The following is a summary of the tax highlights contained in the budget.

Budget highlights

  • The 2012 Budget builds on a strong economy, with an estimated surplus of $776 million for 2011-12, but expects some economic challenges in the next few years with anticipated deficits of $258 million for 2012-13 and $433 million in 2013-14 before a return to a surplus position.
  • Real gross domestic product (GDP) will increase by a modest 0.1% as a decline in oil revenues will result from two of the province’s three producing oil fields being shut down for a period of planned maintenance. Oil revenues are estimated at $2.2 billion based on $124/bbl.
  • Capital investment will increase by 30% to a record $9.6 billion as expansion continues in the province’s mining sector, Hebron oil field and infrastructure projects.
  • Net debt is at $7.8 billion, and net debt to GDP has improved from a high of 70% in 2004 to 25% projected for 2013.
  • The 2012-2013 deficit is forecast on revenues of $7.2 billion and expenses of $7.5 billion with expenditures growing by 1.7% and nominal reductions in government work force.

Measures concerning business

  • No changes in corporate tax rates.
  • Over $100 million in funding to increase apprenticeship training and enhance workforce development.
  • Almost $200 million to support innovation and development of aquaculture, ocean technology and tourism.
  • Over $900 million for infrastructure improvements, mostly road construction and public buildings.

Measures concerning individuals

  • No changes to personal income tax rates.
  • Seniors will be provided with a 35% discount on a number of items such as motor vehicle registration, driver’s licences and other fees.
  • Continued freeze on tuition, non-repayable grants for post–secondary and no interest on the provincial portion of student loans.

Sales tax measures

  • No changes to sales tax rates.

Other measures

  • Nearly $3 billion to improve health care for all residents.

For further details on the provincial budget, please visit www.budget.gov.nl.ca/budget2012.

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