B.C. Finance Minister Carole James tabled the 2018 B.C. Budget in Victoria on 20 February 2018

2018 B.C. Budget Commentary^©

On 20 February 2018, B.C. Finance Minister Carole James delivered the first provincial budget since the NDP last formed government in 2001. The balanced 2018 budget (hereinafter known as the Budget) alleged that it will make life more affordable for British Columbians in housing, child care and medical service plan premium elimination. The following is a summary of the Budget highlights. The information contained herein is current as of the last revision date below.

Tax Related Changes

• A 0.5% speculation tax on homes owned by people who do not pay taxes in British Columbia. This includes Canadians who do not pay taxes in B.C. and those who leave their properties vacant. The tax goes up to 2% in 2019 and will stay at that rate going forward.
• Effective 21 February 2018, the foreign home buyers tax is going up from 15% to 20%. Geographic regions in which the tax apply expand from Metro Vancouver to the Capital Regional District, the Fraser Valley, the Central Okanagan and the Nanaimo Regional District.
• Property transfer tax and school tax will be increased from 3% to 5% for homes valued more than $3 million.
• Deductibles for families with annual incomes below $30,000 in the Fair PharmaCare program will be eliminated.
• B.C. will start collecting an Employer Health Tax in January 2019. The Medical Service Plan (MSP) premiums will be eliminated by 1 January 2020. Businesses with annual wages paid over $500,000 a year will be required to pay the new tax up to 1.95%.
• Starting 1 April 2018, provincial sales tax (PST) will be increased from 10% to 15% on luxury vehicles priced between $125,000 and $149,000. PST on vehicles over $150,000 will be increased from 10% to 20%.

Other Changes

• Starting on 1 April 2018, parents with children placed in licensed care will be eligible for fee reductions.
• Effective on 1 April 2018, fares on three major ferry routes in B.C. will be frozen and senior passengers will be able to ride free again Monday through Thursday.
• Rental assistance to low-income working families will be increased by an average of $800 per year and $930 per year to seniors.

Media responses to the Budget

Remarks

While the MSP premium will be eliminated by 1 January 2020, the new Employer Health Tax will become effective in January 2019. This year long double dipping is highly criticized. Double dipping is generally not allowed if taxpayers are using similar schemes to reduce their tax bills. It is likely that the B.C. government will receive more money from the Employer Health Tax than from MPS premium.

To combat tax fraud, the Budget proposed to strengthen the powers of tax auditors to ensure tax compliance in pre-sale condo reassignments and hidden ownership. Numbered companies will no longer be allowed to own homes and to deal with mega-homes built on Agriculture Land Reserve Land.

Freezing the already too high ferry fares is good but does not significantly help ferry commuters. Restoring the Monday-Thursday 100% fare discount for senior ferry passengers appears to score more brownie points in the next election.

Few British Columbians are aware that a new standalone Ministry of Mental Health and Addictions was created in 2017. One mandate of the new ministry is to assist families with loved ones lost in drug overdose. The B.C. government alleged that focus will be moved from emergency response to a more integrated, proactive and preventive approach that helps people in drug addiction. In view of the legalization of recreational marijuana in July 2018, it is inconceivable how proactive and preventive approach could be meaningful.

In September 2017, tuition fees for youth formerly in care (ie. children who have been removed by the Ministry of Children and Family Development) was removed. The Budget alleged that this support helps more than 800 former youth in care. Removed children enjoy many benefits unavailable to those from normal families, including waivers of admission application fees in most Canadian universities and post-secondary college. However, in view of the low high school graduation rate among removed children, it is doubtful how many of them will actually enjoy the benefits.

The Budget also sets aside funds to fight wildfire and to build true and lasting reconciliation with Indigenous peoples. While Indigenous children remain the largest ethnic group in government care across Canada, we wonder how true and lasting reconciliation is possible when cultural assimilation and state-sponsored children removal continue in form of child protection.