Small businesses in Newfoundland and Labrador still pay a 15% tax on their insurance, the highest rate in Canada, and six points higher than the next jurisdiction (Quebec) at 9%. Meanwhile, provinces like New Brunswick, Prince Edward Island, Nova Scotia, Alberta, and British Columbia don’t charge this tax at all.
It’s no surprise that 70% of local businesses say insurance costs are their biggest financial burden.
A bit of history for context: this tax was removed in 2008 but brought back in 2016 when the province needed more revenue, and small businesses have been covering the cost ever since.
This extra expense makes it harder for businesses to survive, grow, and create jobs. Removing it would allow owners to keep more of their money to reinvest, pay down debt, and strengthen the local economy.
Retail sales tax on insurance premiums in different provinces of Canada
| Province |
RST |
| Newfoundland and Labrador |
15% |
| Quebec |
9% |
| Ontario |
8% |
| Manitoba |
7% |
| Saskatchewan |
6% |
| New Brunswick |
NO TAX |
| Prince Edward Island |
NO TAX |
| Nova Scotia |
NO TAX |
| Alberta |
NO TAX |
| British Columbia |
NO TAX |
Where does CFIB stand?
We believe newfoundland and Labrador’s insurance tax puts an unnecessary burden on small businesses and holds them back from reaching their full potential. It’s a barrier to growth at a time when small businesses in the provinces are ready to move forward and strengthen its economy. Now is the right time for the government to show it upports local businesses by removing this cost for good. It’s a straightforward step that would have an immediate, positive impact for small business owners across the province.
What are we doing to advocate for small businesses?
We’re working hard to get this extra cost off the backs of small businesses. Our team has met directly with the Premier, Deputy Premier, Finance Minister, Treasury Board, and other key ministers, as well as the opposition and the NDP, to build support from all sides.
To show just how much this matters, we’ve launched a public petition and shared clear numbers: 70% of Newfoundland and Labrador small businesses say insurance is their biggest cost burden.
As the fall election approaches, we’ll keep making sure dropping the insurance tax is a top priority for all parties.
Our recent press release outlines more of our advocacy work in eliminating RST in Newfoundland and Labrador.
If this tax affects your business or you want to see stronger advocacy to help small businesses thrive, consider becoming a CFIB member today.
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