The eastern Canadian province of Newfoundland and Labrador is imposing a new 15 percent retail sales tax on home, auto and business insurance policies. Effective July 1, 2016, all new or renewing insurance policies in the province will be subject to this tax.
In addition, the existing government tax that is paid on insurance premiums will increase by 1 percent.
“This is a tax and not an increase on insurance premiums,” said Amanda Dean, vice president, Atlantic, Insurance Bureau of Canada (IBC).
IBC said that the tax comes at a time when the number of auto insurance claims in Newfoundland and Labrador continues to rise, and claims have been getting more expensive. Between 2004 and 2014, the average increase in claims costs per vehicle was 41 percent in Newfoundland and Labrador, compared with 20 percent in New Brunswick, 10 percent in Nova Scotia and no increase in Prince Edward Island.