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BC 2017 Budget

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British Columbia-> Budget 2017

British Columbia 2017 Budget - February 21, 2017

Bill 8, the Budget Measures Implementation Act, 2017 was tabled on February 21, 2017.  It passed only first reading before the BC election, which resulted in a minority government.  The minority government was defeated in a confidence vote, so Bill 8 will not be passed.  A 2017 Budget Update was provided on September 11th.

See the NDP platform (pdf) regarding which changes will be supported by the new government.

Medical Service Plan (MSP) Premiums

Effective January 1, 2018, the premium rates for those with adjusted family net income of $120,000 and less will be reduced by 50%, and the threshold for elimination of premiums is increased from $24,000 to $26,000.  The NDP platform indicates that this change will be implemented.

Income Tax

BC Back-to-School Tax Credit

This credit was announced previously, and is included in the budget.  See above link for details.

Volunteer Firefighter or Search & Rescue Volunteer Tax Credit

This new non-refundable tax credit is available for the 2017 taxation year, and will have the same eligibility criteria as the federal credit.  If someone is available for either the federal Volunteer Firefighter Tax Credit or the federal Search & Rescue Volunteer Tax Credit.  The tax credit will be $3,000 x the lowest tax rate of 5.05%, for a credit of $151.50.  See the above link for the information on the federal tax credit.

Small Business Corporate Income Tax Rate

The budget proposes to reduce the BC small business corporate income tax rate from 2.5% to 2.0% effective April 1, 2017.  The NDP platform supports this reduction, and indicates it will increase the general corporate tax rate from 11% to 12%, but the timing of these changes is unknown.

Non-Eligible Dividend Tax Credit

As a result of the reduction of the small business corporate income tax rate, the BC dividend tax credit rate for non-eligible dividends will be reduced from 2.47% of the taxable dividend to 2.18%, effective for the 2017 taxation year.  The BC marginal tax rate table for 2017 has been revised to reflect this change.

Education Tax Credit

The education tax credit is eliminated for the 2018 and subsequent taxation years.  The federal education and textbook tax credits were eliminated effective for the 2017 and subsequent taxation years.

Homeowners

bulletAs previously announced, the threshold for the home owner grant phase-out is increased from $1.2 million to $1.6 million for the 2017 tax year.  For properties valued above the threshold, the grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.
bulletThe threshold for the First Time Home Buyers Program Exemption, which provides an exemption from property transfer tax, is increased from $475,000 to $500,000, effective for registrations on or after February 22, 2017.  The partial exemption continues, and now applies to homes valued between $500,000 and $525,000, for registrations on or after February 22, 2017.

Sales & Tobacco Taxes

bulletEffective October 1, 2017, the provincial sales tax rate on purchases of electricity will be reduced to 3.5% from 7%.  Effective April 1, 2019, electricity in BC will be exempt from PST.
bulletEffective October 1, 2017, the tax rate on cigarettes is increased to $49.40 from $47.80 per carton of 200 cigarettes, and the tax rate on fine-cut tobacco is increased to 24.7 cents from 23.9 cents per gram.

There are more tax changes in addition what we've detailed above, including changes to:

bulletBook Publishing Tax Credit  - extended by 2 years to include amounts received before April 1, 2019
bulletBC Mining Flow-Through Share Tax Credit - extended by 1 year to December 31, 2017
bulletFilm and Television Tax Credits - regional location boundary adjusted
bulletProduction Services Tax Credit - regional location boundary adjusted
bulletInteractive Digital Media Tax Credit - amended
bulletMining Exploration Tax Credits - both personal and corporate - qualifying expenses expanded
bulletScientific Research & Experimental Development Tax Credit - extend by 5 years to include SR&ED in BC carried on before September 1, 2022
bulletTraining Tax Credits - eligible period extended 3 years to December 31, 2020.

For more information see the Budget Tax Changes document.

See Budget 2017 on the Ministry of Finance website for complete budget details.

Revised: September 19, 2017

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