Newfoundland and Labrador deficit budget raises taxes, fees in election year

ST. JOHN’S, N.L. – Newfoundland and Labrador has delivered an $8.1-billion budget for 2015-16 that forecasts a $1.1-billion deficit and raises taxes and fees.

Amid the hallmarks of a looming recession, the Progressive Conservative government will raise the provincial harmonized sales tax to 15 per cent from 13 per cent as of January 1, 2016.

It will also introduce new tax rates for the highest income earners and hike fees on everything from drivers’ licences to campsite rentals.

Deficits totalling $1.6 billion are projected for the next three fiscal years, with economic contraction and higher unemployment through 2018.

The government plans to borrow $2 billion to cover spending on the Muskrat Falls hydro project in Labrador, pension reform, road work, health care and other services.

Premier Paul Davis is expected to call an election this fall.