2023 British Columbia Budget Summary

Brian Steeves, Garrett Louie, Quyen Do, Stephen Zhang
| 2/28/2023

On February 28, 2023, Katrine Conroy, British Columbia’s Finance Minister, announced the 2023 British Columbia Budget. With tightened household budgets due to inflation and a rumored global economic downturn, the Budget aims to protect B.C.’s citizens and set a strong foundation for a secure future. No changes were made to the existing provincial personal and corporate tax rates.

Crowe MacKay’s tax experts summarize British Columbia’s new tax measures below. If you require assistance, connect with us in Alberta, British Columbia, Northwest Territories, or the Yukon.

Family Playing

Income Tax Act

Increased B.C. Family Benefit

For the months of January, February, and March 2023, B.C. Family Benefit amounts increased. This was part of a relief package for B.C. families to help better manage the rising costs of living. From April 2023 onward, these benefits will return to their normal amounts.

Budget 2023 permanently increased the amounts for the B.C. Family Benefit effective July 1, 2023, based on the number of children under 18 within a family.

The maximum annual benefit will increase to: 

  • $1,750 for the first child
  • $1,100 for a second child
  • $900 for each subsequent child

For families with adjusted family net income over $27,354, the maximum annual benefit is phased out. This means a two-parent household with two children could receive up to an additional $250 per year.

The minimum annual benefit will increase to: 

  • $775 for the first child
  • $750 for a second child
  • $725 for each subsequent child

This applies to families earning up to an adjusted family net income of $87,533. This means a two-parent family with two children receiving the B.C. Family Benefit will receive at least an additional $145 per year. 

Effective July 1, 2023, Budget 2023 announced that a maximum annual supplement of $500 will be provided to single parent families. The supplement is added to the maximum annual benefit otherwise available to the parent, meaning a single parent with two children could receive up to an additional $750 per year after the benefit increase and the additional supplement. 

Increased Climate Action Tax Credit

Effective July 1, 2023, Budget 2023 increased the maximum annual climate action tax credit increases to:
  • $447.00 for an adult (formerly $193.50)
  • $223.50 for a spouse or common-law partner (formerly  $193.50)
  • $111.50 per child (formerly $56.50)

Single-parent families will continue to receive the spouse or common-law partner amount for the first child in the family.

The tax credit helps offset the effects of carbon taxes paid by low-to moderate-income individuals and families. It is being increased as a result of revenue generated by the scheduled carbon tax rate increase this year.

People Moving

New! Income-Tested Renter’s Tax Credit

Effective January 1, 2023, Budget 2023 introduced a new refundable renter’s tax credit. Households eligible to claim the credit include those that rent and occupy living accommodation in B.C. for at least six months in a calendar year. The credit will be income-tested, providing a maximum credit of $400 per year for households with adjusted income up to $60,000. Households with adjusted income above the $60,000 threshold will receive a gradually reduced credit, being reduced to zero at $80,000 based on the 2023 taxation year. These thresholds will be indexed to inflation each year. 

Eligibility for the renter’s tax credit will exclude amounts paid for: 

  • a campsite, 
  • a moorage, or
  • a manufactured home site, under a rent-to-own plan, or by employers for accommodation that is not required to be included as income. 

Qualifying rental payments must be paid to unrelated persons. The credit will be available for individuals who are 19 years of age and over and are residents in B.C. on December 31 each year.

Extended Farmer’s Food Donation Tax Credit

Budget 2023 extended the farmers’ food donation tax credit for three years and is set to end in 2026.

The tax credit is expected to provide indirect benefits to food bank clients, who are disproportionately low-income earners on income or disability assistance.

Extended Interactive Digital Media Tax Credit

Budget 2023 extended the interactive digital media tax credit for five years, ending on August 31, 2028.

Provincial Sales Tax Act

New! Exemption for Automated External Defibrillators

Exempt from provincial sales tax are automated external defibrillators (AEDs). This will come into effect March 1, 2023. Kits containing AEDs, and parts and services for AEDs, including pads, will also be exempt from provincial sales tax. 

Amended Rules on Online Marketplace Facilitators and Online Marketplace Services

Effective July 1, 2023, Budget 2023 amended rules related to the collection obligation of online marketplace facilitators and the taxation of online marketplace services are amended to be clearer, simple, and consistent.

Specifically, the rules are amended so online marketplace services are taxable when an online marketplace facilitator provides service to facilitate the sale or provision of non-taxable services.

Rules establishing when an online marketplace service is taxable are amended, aligning more closely with the place-of-supply rules used to administer the federal goods and services tax. 

Technical changes made include:

  • The tax collection obligations of online marketplace facilitators in respect of commercial sales.
  • The rules on when an online marketplace facilitator is considered to provide an online marketplace service.
  • The definitions of:
  • online marketplace facilitator
  • online marketplace seller
  • online marketplace service

Changes do not impose new taxes on taxable goods, software, or taxable services obtained by consumers through online platforms. Changes will affect some purchases of services by online businesses.

Provincial Sales Tax Act Amendments

Budget 2023 addressed the following amendments to the Provincial Sale Tax Act to further clarify certain items.

  • Effective April 1, 2013, for the provincial sales tax, the federal goods and services tax does not form part of the taxable purchase price of goods brought or sent into B.C. for use.
  • Effective September 1, 2022, for the provincial sales tax, the federal luxury tax imposed under the Select Luxury Items Tax Act does not form part of the taxable purchase price or lease price; and
  • Effective July 1, 2023,  that heated tobacco products are not included in the definition of “vapour product,” which makes a temporary change now a permanent change.
Person Contractor Blurry

Property Transfer Act

New! Partial Exemption for New Purpose-built Rental Buildings

Effective for transactions on or after January 1, 2024, the purchase of new purpose-built rental buildings will be exempt from the further 2% property transfer tax that is applied to the fair market value of the residential component of a taxable transaction that exceeds $3 million. Purpose-built rental buildings are those that are non-stratified and rented on a monthly basis or longer for at least 10 years. The residential portion must be entirely for rental and have at least four apartments. 

Other Technical Measures

Other technical changes were included in Budget 2023 to clarify amendments that were previously announced. 

For more information on the 2023 British Columbia Budget, please visit the Government British Columbia’s website.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. This publication is not a substitute for obtaining personalized advice.

If you are looking for Tax Services, Crowe MacKay provides personalized support. Our tax professionals will help you maximize tax-planning opportunities and ensure the minimum amount required by law is paid.

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Brian Steeves
Brian Steeves
Partner, Incorporated, Tax
Garrett Louie Tax Expert
Garrett Louie
Partner, Incorporated
Quyen Do
Quyen Do
Partner, Incorporated
Stephen Zhang
Stephen Zhang

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