February 20, 2019
Issue 2019-06
On February 19, 2019, British Columbia’s Minister of Finance, Carole James, presented the province’s budget. The budget:
This Tax Insights discusses these and other tax initiatives outlined in the budget.
British Columbia’s corporate income tax rates will remain as shown in the table below. The table also shows combined federal/British Columbia corporate tax rates.
Federal and BC corporate rates |
BC |
Federal + BC |
|||
---|---|---|---|---|---|
|
2018 - 2020 |
2018 |
2019 - 2020 |
||
General and M&P income |
12% |
27% |
|||
Canadian-controlled private corporations (CCPCs) |
active business income to $500,000 |
2% |
12% |
11% (1) |
|
investment income |
12% |
50.67% |
1. The combined rate reflects the decline in the federal small business tax rate from 10% to 9% on January 1, 2019.
The small business venture capital tax credit program is enhanced as follows:
The budget extends BC’s:
The budget does not change BC personal income tax rates. Top combined federal/BC personal income tax rates are shown below. These rates apply to individuals with taxable incomes above $210,371 in 2019 ($205,842 in 2018)
Top combined federal/BC rates |
2018 |
2019 |
|
---|---|---|---|
Ordinary income & interest |
49.80% |
||
Capital gains |
24.90% |
||
Canadian dividends |
eligible |
34.20% |
31.44% |
non-eligible |
43.73% |
44.63% (1) |
1. The combined non-eligible dividend tax rate reflects the decline in the federal non-eligible dividend tax credit rate (which results from a decrease to the federal small business tax rate, as noted above)
Effective October 1, 2020, a new BC Child Opportunity Benefit will be combined with the existing early childhood tax benefit into a single new benefit. This refundable tax credit will provide a benefit of up to:
The benefit will be reduced if family net income exceeds $25,000 and begin to be phased-out if family net income exceeds $80,000. The thresholds will be indexed for inflation. The Canada Revenue Agency will administer the benefit, alongside the federal Canada Child Benefit.
The climate action tax credit is enhanced, effective July 1, 2019, as shown in the table below.
Maximum credit |
2018 |
July 1, 2019 |
July 1, 2020 |
July 1, 2021 |
---|---|---|---|---|
Per adult (1) |
$135 |
$154.50 |
$174 |
$193.50 |
Per child |
$40 |
$45.50 |
$51 |
$56.50 |
1. Single-parent families will continue to receive the adult amount for the first child in the family.
The budget:
The budget extends the new mine allowance by one year to the end of 2020.
In addition, as previously announced, the following tax credits are made permanent:
Effective on royal assent, a principal and agent will be able to jointly designate a single party to be responsible for tax collection, reporting and remittance obligations when a principal uses an agent to make a sale or lease, or when a billing agent is used to collect payments. Where sales are made by auction, an auctioneer acting as agent will be automatically designated as the party responsible for collecting, reporting and remitting the PST unless the parties jointly elect to assign the obligations to the principal.
Effective on royal assent, persons who sell natural gas at the retail level in British Columbia, but are not registered as natural gas retail dealers, will be subject to a penalty.
Effective July 1, 2019, the TransLink service region’s motor fuel tax rates on clear gasoline and clear diesel will be eligible to be increased from 17¢ per litre to a maximum of 18.5¢ per litre.
In 2019, British Columbia will continue to apply its longstanding rate-setting policies for:
To provide clarity and certainty, various amendments will be made to the: