2015 B.C. Budget Commentary^©

B.C. Finance Minister Mike de Jong tabled the 2015 B.C. Budget in Victoria on 17 February 2015

On 17 February 2015, B.C. Finance Minister Mike de Jong tabled his budget. Three years in a row, this 2015-16 budget surplus hits $879 million, nearly double earlier forecasts. The following is a summary of the tax highlights. The information contained herein is current as of the last revision date below.

Personal Tax Changes

• Families eligible for a new PST tax credit on up to $250 worth of children's sports equipment, worth $12.65 per child.
• Effective 1 September 2015, child support payments will be fully exempted from income assistance calculations. People on income or disability assistance will be able to keep all of their child support payments. The controversial child support claw back is now ended.
• Children born since 1 January 2007, are now eligible for one-time training and education savings grant of $1,200.
• Early childhood tax benefit of $660 per year for children under six starts 1 April.
• Temporary personal income tax rate of 16.8% on individuals earning over $150,000 will be eliminated, as scheduled on 1 January 2016.
• No changes to BC Ferries funding, minimum wages or social assistance rates.
• A $500 education coaching tax credit for teachers and teaching assistants in support of extra-curricular sports and arts opportunities in our schools.
• This budget provides an additional $250 children’s fitness equipment tax credit, which will be set at 50% of the amount claimed for the existing B.C. children’s fitness credit (parents do not have to keep receipts for equipment).

Business Tax Changes

• Training tax credit for employers hiring apprentices is extended to the end of 2017. This year’s budget will also extend the enhanced credit that provides an additional 50% for First Nations individuals, people with disabilities, and their employers.
• To support the film industry, digital animation or visual effects tax credit to include post-production film activities.
• This budget extends the Interactive Digital Media tax credit to 2018 to continue offsetting the cost of developing video games and other digital media products.
• A one-year increase of $3 million to the Small Business Venture Capital tax credit program is provided in this budget. This program will allow for up to $10 million in additional equity financing for qualifying new businesses in 2015.

Other Changes

• Medical Services Plan premiums will continue to rise by four per cent, to $75 per month for individuals, $136 for a family of two, and $150 for families of three or more.
• $3 billion funding increase for health care over three years.

Source: policynote.ca

Remarks

The budget does not contain any general corporate or personal income tax rate changes. While provincial debt continues to rise to an estimated $70 billion, the $879 million surplus is not be used to pay down the debt. The Finance Minister said that debt is expected to be paid down in 2016-17 if there is a surplus. Running a surplus does not mean that the province is prospering. Job market remains weak. Many families continue to struggle with economic insecurity and poverty and live on pay cheque to pay cheque. Our colleges and universities keep raising tuition fees and yet are delaying necessary building repairs due to lack of funds.

Critics of the budget complain that the richest 2% of British Columbians are getting 17 times more (or $227 million) with the phase out of the tax bracket at $150,000, while poor people receive relatively much less ($13 million due to the elimination of claw-back on child support payments). The middle class receives little benefit from this budget.

The B.C. Government alleges that the province continues to have one of the lowest overall tax burdens in Canada when all taxes are considered — including income tax, consumption tax, MSP premium and payroll tax. This statement on the last page of the "Balanced Budget 2015 Highlights" shrewdly left fee burdens and transit levy outside. While overall tax burdens in B.C. may be the lowest, the overall costs of living is certainly not. High real estate prices in the Lower Mainland render housing not affordable to young people. Furthermore, the B.C. government tends to shift tax burdens to fee burdens (such as toll fees on bridges, high post-secondary tuition fees, transit levy outside income tax returns). This amounts to creative accounting method is misleading financial statement users.

Another disturbing tax issue outside this budget is the Transit Referendum scheduled in March 2015. Please click the link (in blue text) to view our comments on this issue.