British Columbia Budget Summary 2020

British Columbia Budget Summary 2020

Tax Team
2/19/2020
British Columbia Budget Summary 2020

On February 18, 2020, British Columbia Finance Minister Carole James announced the 2020 British Columbia Budget. Highlights of the Budget are summarized below.

Income Tax Measures

Personal Income Tax Rates

A new top personal income tax bracket is introduced effective for the 2020 and subsequent tax years. An individual’s taxable income exceeding $220,000 will be subject to a provincial personal income tax rate of 20.5%, an increase from 16.8%. The combined federal and provincial tax rate at this income level is 53.50%.

Consequential to this increase in the rate of tax, the provincial charitable donation tax credit for individuals is increased to 20.5% for charitable donations over $200 in respect of the individual’s income subject to the new tax rate.

Training Tax Credits Extended

The Training Tax Credits are extended for three years to the end of 2022.

Farmers’ Food Donation Tax Credit Extended

The Farmers’ Food Donation Tax Credit is extended for three years to the end of 2023.

Production Services Tax Credit Pre-Certification Notification Introduced

Effective July 1, 2020, corporations intending to claim the production services tax credit must notify the certifying authority of their intent to do so within 60 days of first incurring an expenditure eligible for the credit.

Production Services Tax Credit Certification Fees Set

Effective February 19, 2020, the accreditation certificate fee for the production services tax credit is increased to $10,000.

Provincial Sales Tax Measures

Registration Requirements Expanded

Effective July 1, 2020, new Provincial Sales Tax registration requirements will apply. Canadian sellers of goods, and Canadian and foreign sellers of software and telecommunications services, will be required to register as Provincial Sales Tax collectors if their specific B.C. revenues exceed $10,000. Furthermore, all Canadian sellers of vapour products will be required to register if they cause vapour products to be delivered to B.C. consumers.

Refund for Real Property Contractors Working Outside B.C. Expanded

Effective February 19, 2020, real property contractors who perform value-added work to goods and then install those goods into real property outside B.C. can apply for refunds of the provincial sales tax paid on those goods.

Other Measures

Property Transfer Tax Act – Exemption from Additional Property Transfer Tax for Certain Canadian-Controlled Limited Partnerships

Effective on a date to be specified by regulation, a new exemption from additional property transfer tax will be available for qualifying Canadian-controlled limited partnerships. This exemption will treat Canadian-controlled limited partnerships in a manner more consistent with Canadian-controlled corporations. With respect to housing in B.C., the exemption should help ensure that new housing developments are treated similarly irrespective of whether the development is being undertaken by a Canadian-controlled corporation or by a Canadian-controlled limited partnership.

Home Owner Grant Act – Threshold for Home Owner Grant Phase-Out Decreased

As previously announced on January 3, 2020, the threshold for the phase-out of the home owner grant is decreased to $1,525,000 from $1,650,000 for the 2020 tax year. For properties above the threshold, the grant continues to be reduced by $5 for every $1,000 of assessed value in excess of the threshold.

B.C. Access Grant

The B.C. Access Grant is a new up-front, needs-based student grant program that will be effective in September of 2020. The grant complements the Canada Student Grant for Full-time Students and will provide B.C. students with up to $4,000 a year to help with the cost of programs leading to a degree, diploma or certificate. A summary of how the grant works is provided below.

 

Program length   BC Access Grant  Canada Student Grant for Full-time Students  Total 
Under 2 years  Up to $4,000 a year  N/A  Up to $4,000 a year
2 years and over  Up to $1,000 a year   Up to $3,000 a year  Up to $4,000 a year

 

Starting in September 2020, eligible students applying for student financial assistance from StudentAid BC will be automatically assessed for the B.C. Access Grant, so there is no need for them to apply separately. Grant funding can be used toward tuition costs but it can also be used for basic living expenses, such as the cost of rent, groceries or transit.

B.C. Child Opportunity Benefit

The B.C. Child Opportunity Benefit was announced during the 2019 BC Budget. Effective October 1, 2020, this new benefit will support families with children under the age of 18 as follows:

  • Up to $1,600 per year for families with one child
  • Up to $2,600 per year for families with two children
  • Up to $3,400 per year for families with three children

The benefit is reduced at a rate of 4% of family net income over $25,000 until it is equivalent to $700 for the first child, $680 for the second child and $660 for each subsequent child under the age of 18. The benefit is phased out at a rate of 4% of family net income over $80,000. The $25,000 and $80,000 thresholds will be indexed to inflation in subsequent years. The family net income level for the benefit to completely phase out is $97,500 for a family with one child and $114,500 for a family with two children.

 

For more information on the 2020 British Columbia Budget, please visit the Government of British Columbia website at the following address:

https://www.bcbudget.gov.bc.ca/2020/

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