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2010 B.C. Budget Commentary©

Hansen, Colin
B.C. Finance Minster Colin Hansen announcing the 2010 B.C. Budget in Victoria

On March 2, 2010, the Honourable Colin Hansen delivered his second budget as Minister of Finance. The following is a summary of the tax highlights. The information contained herein is current as of March 2, 2010.

Personal Tax Changes

Business Tax Changes

Harmonized Sales Tax (HST)

Other Notable Changes

Comparisons of Major Tax Rates Among Canadian Provinces and Territories

The chart below compares top personal and corporate tax rates and sales taxes in 2010 for all provinces and territories.

Provinces/Territories

B.C.

Alberta

Saskatchewank

Manitoba

Ontario

Quebec

NB

NS

PEI

NFL

Yukon

NWT

Nunavut

Top 2010 Personal Rates %

43.7

39

44

46.4

46.41

48.22

43.3

48.25

47.37

44.5

42.4

43.05

40.5

2010 Corporate Tax Rates

General %

28.5

28

30

30

32(2)

29.9

30(3)

34

34

32

33

29.5

30

M&P(0) %

28.5

28

28

30

30(2)

29.9

30(3)

34

34

23

20.5

29.5

30

Small Business %

13.5

14

15.5

12(1)

16.5(2)

19

16

16

13.1(4)

16

15(5)

15

15

Provincial Retail Sales Tax %

7(6)

-

5

7

8(6)

7.5(7)

8(8)

8(8)

10(7)

8(8)

-

-

-

Notes to the Table Above

  1. M&P stands for manufacturing and processing. It generally involves making a product for the purpose of sale or lease.
  2. The combined small business rate will be reduced to 11.0% on December 1, 2010.
  3. The Ontario corporate rates will be reduced on July 1, 2010. The general business rate will be 30%, the M&P rate will be 28% and the small business rate will be 15.5%.
  4. The combined general business and M&P rates will be reduced to 29.0% on July 1, 2010.
  5. The combined small business rate will be reduced to 12.0% on April 1, 2010.
  6. The tax rate for M&P profits eligible for the small business deduction is 13.5%.
  7. The provincial sales tax will be harmonized with the GST on July 1, 2010 (combined rates will be 13% in Ontario and 12% in BC).
  8. Provincial sales tax applies on GST. Effective combined rate is 12.875% in Québec and 15.5% in PEI.
  9. As part of the HST (combined rate is 13% with GST).

Remarks

Despite the alleged success of the 2010 Winter Olympic and the forthcoming of the Paralympic Winter Games, B.C. will continue to run on a deficit budget of $1.7 Billion for 2010-11. According to government projections, the provincial budget will not balance until 2012-13.

BC Budget 2010 also provided support for more affordable housing and families with children, notably a new property tax deferral program for families with children under age 18 (starting 2010).

MCFD 2010 Budget Resource Summary Table

The unpopular HST has attracted organized opposition from various groups. Led by B.C. former premier Bill Vandersam, effort seeking a HST referendum is underway. It is difficult to change laws passed by a majority government. Mr. Vandersam's noble effort is likely to be futile. It is also noteworthy to remark that civil servants working on the soon-phased out PST regime received a transfer package to work for Canada Revenue Agency (CRA). Unlike the Ontario provincial government (who generously pay its transferred employees a 6-month severance pay when they suffer no loss of employment and their job security is guaranteed by a 2-year contract), B.C. government will not pay severance pay to those who are about to be transferred to CRA.

The 2010 Budget of the Ministry of Children and Family Development (MCFD) is vague (as usual) and does not allow readers to identify the costs of "child protection" activities like legal expenses, compensations of wrongful deaths, foster parents' fees, ... etc. In the Resource Summary Table below (on page 21 of the 2010 MCFD Budget), MCFD's activities are vaguely described as "Children and Family Development" with a core business value characterized as "strong, safe and supported".

2010 MCFD budget discussed 7 "performance measures". Performance Measure # 3 on page 19 projected the number of families participating in "collaborative planning decision making process" will increase to 5,300 from 2008-09 baseline of 2,967. Special interests in this multi-million dollar "child protection" industry have successfully influenced the government to allocate more fundings to their activities even in time of economic difficulty. It is done tactfully at a gradual and small increment that would not attract attention of any watchdogs. Furthermore, it appears that service providers in this unique industry are able to determine or correctly estimate the demand of their services.



[This page was added on 8 March 2010, last revised 27 March 2010.]