Highlights of the Newfoundland and Labrador budget: Big tax hikes, big cuts

ST. JOHN’S, N.L. – Highlights of the Newfoundland and Labrador budget presented Thursday:

—An $8.5-billion spending plan that raises the Harmonized Sales Tax to 15 per cent from 13 per cent as of July 1.

—An income-dependent “deficit reduction levy” of up to $900 a year for the highest earners to fight a deficit still forecast to reach $1.8 billion this fiscal year. Those with $20,000 taxable income or less exempt.

—Offshore oil royalties that once provided 30 per cent of provincial revenues have crashed to an estimated seven per cent at $502.1 million.

—Gas tax increase of 16.5 cents per litre as of June 2, to be reviewed in the fall.

—Starting Friday tobacco tax rises one cent per cigarette.

—Class sizes to increase for Grades 4 to 12, operational grant to Memorial University of Newfoundland cut by $14 million.

—Measures to cut spending and raise cash will cost average families $3,000 a year, and will trim about 650 public-sector jobs and 2,000 private jobs.

—Income tax hikes for all brackets. Those earning $35,000 to $70,000 will pay 13.5 per cent, up from 12.5 per cent. The rate goes up another percentage point in 2017.

—Corporate income tax rate goes to 15 per cent from 14 per cent, retroactive to Jan. 1, 2016.

—Return to modest surplus by 2022-23, assuming Brent crude trades for US$74 a barrel, up from about US$44 in trading this week.