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British Columbia 2017 Budget Update - September 11, 2017
Bill 2, the Budget Measures Implementation Act, 2017 was tabled on September 11, 2017. The Bill received Royal Assent on November 2, 2017.
Medical Service Plan (MSP) Premiums
Effective January 1, 2018, the premium rates for all British Columbians will be reduced by 50%, and the threshold for elimination of premiums is increased from $24,000 to $26,000. The government commits to eliminate MSP premiums within 4 years.
Income Tax
Personal Income Tax Rates
The Budget introduced a new top personal income tax rate of 16.8% for taxable income in excess of $150,000, effective January 1, 2018. Currently, the highest personal tax rate is 14.7%. The $150,000 threshold will be indexed in subsequent years.
BC Back-to-School Tax Credit - eliminated
This credit was announced previously as a new tax credit beginning in 2016. It is not available in 2017 or later years.
Volunteer Firefighter or Search & Rescue Volunteer Tax Credit
This new non-refundable tax credit is available for the 2017 taxation year, and has the same eligibility criteria as the federal credit. If someone is eligible for either the federal Volunteer Firefighter Tax Credit or the federal Search & Rescue Volunteer Tax Credit, they will be eligible for the BC 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.
Corporate Income Tax Rates
The budget update confirms that it will reduce the BC small business corporate income tax rate from 2.5% to 2.0% effective April 1, 2017, as was indicated in the previous Liberal 2017 budget. The general corporate income tax rate will be increased from 11% to 12%, effective January 1, 2018.
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 is 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. This change was in the February budget (not passed), and confirmed in the September budget update.
Enhanced Dividend Tax Credit for Eligible Dividends
The budget increases the dividend tax credit for eligible dividends, from 10% to 12%, effective January 1, 2019.
Education Tax Credit
The federal education and textbook tax credits were eliminated effective for the 2017 and subsequent taxation years. The March 2017 Budget indicated that the BC education tax credit was going to be eliminated for the 2018 and subsequent taxation years. It was not mentioned in the September 2017 budget, so perhaps it will not be eliminated.
Child Arts, Child Fitness and Child Fitness Equipment Tax Credits
These tax credits are eliminated after the 2017 taxation year.
Homeowners
The 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, Carbon & Tobacco Taxes
 | The provincial sales tax rate on purchases of electricity will be reduced to 3.5% from 7%. Once Bill 2 receives Royal Assent, the government intends to provide at least one month of notice before this change takes effect. Effective April 1, 2019, electricity in BC will be exempt from PST. Note that residential electricity is already exempt from PST. |
| Effective on a date to be announced after Bill 2 is passed, the tax rate on cigarettes will be increased to $49.40 from $47.80 per carton of 200 cigarettes, and the tax rate on fine-cut tobacco will be increased to 24.7 cents from 23.9 cents per gram. |
| Carbon tax rates will increase $5 per tonne annually, starting April 1, 2018, until rates equal $50 per tonne on April 1, 2021. |
| Effective on a date to be announced after Bill 2 is passed, natural gas for use in an internal-combustion engine for any rolling stock or vehicle when run on rails is exempt from the 3% per litre tax on locomotive fuel. |
There are more tax changes in addition what we've detailed above, including changes to:
Book Publishing Tax Credit - extended by 1 year to include amounts received before April 1, 2018
BC Mining Flow-Through Share Tax Credit - extended by 1 year to December 31, 2017
Film and Television Tax Credits - regional location boundary adjusted
Production Services Tax Credit - regional location boundary adjusted
Interactive Digital Media Tax Credit - amended
Mining Exploration Tax Credits - both personal and corporate - qualifying expenses expanded
Scientific Research & Experimental Development Tax Credit - extend by 5 years to include SR&ED in BC carried on before September 1, 2022
Training Tax Credits - eligible period extended 1 year to December 31, 2018
Preferential tax treatment for credit unions restored
For more information see the BC September 2017 Budget Tax Changes page.
See Budget 2017 September Update on the Ministry of Finance website for complete budget details.
Revised: November 20, 2024