On February 19, 2019, Finance Minister Carole James tabled British Columbia’s 2019-20 budget. This budget sees the province experiencing strong economic growth (the strongest in the country at 2.7%) and making significant investments in various social and economic areas.
From a fiscal perspective, the province continues to project surpluses over the next three years as follows:
While the tax changes included in this budget were relatively minor, an increase in government spending does present a number of opportunities to individuals and business owners alike. Being aware of these changes will allow you to take advantage of this funding and ensure you are accessing everything that might be relevant to you.
Corporate tax rates
No changes to the corporate tax rates, or the $500,000 small business limit, are proposed. British Columbia’s corporate tax rates for 2019 and 2020 are summarized as follows:
Combined federal and British Columbia corporate tax rates
Enhanced write-offs of capital expenditures
The province has announced, as part of this budget, that it will be paralleling the federal capital cost allowance incentives that were introduced as part of the Fall Economic Statement. These changes will allow businesses to increase the capital cost allowance deduction that is available in the year of purchase for certain capital expenditures, thereby decreasing taxes payable.
Personal income tax rates
No changes to personal income tax rates are proposed. The top combined federal British Columbia marginal tax rates for 2019 are as follows:
BC Child Opportunity Benefit
Effective October 1, 2020, a new BC Child Opportunity Benefit is being implemented as a replacement to the early childhood tax benefit. This benefit is targeted to BC families with children who are under 18 years of age.
The amount of the benefit will be:
- $1,600 for the first child;
- $1,000 for the second child in a family; and
- $800 for each additional child.
The benefit will be reduced by 4% of family net income over $25,000, a threshold that will be indexed to inflation going forward. The advantage of this credit over the previous childhood tax benefit is that parents with children between the ages of 6 and 18 will now qualify.
Parents who are already registered for the federal Canada Child Benefit will be automatically registered to receive the BC Opportunity Benefit. Those who are not currently registered for the federal benefit will need to apply to the Canada Revenue Agency in order to receive this provincial benefit.
Climate action tax credit
In line with the scheduled increases to the carbon tax rate, the personal climate action tax credit will be increased as follows over the next three years:
As in previous years, this credit can be claimed by filing your personal income tax return.
1 A corporation must register with the Government of BC to qualify as a registered venture capital corporation or an eligible business corporation.