On February 19, 2013, B.C. Minister of Finance Michael de Jong
tabled the B.C. provincial budget for the 2013/2014 fiscal year
(Budget 2013). After a projected budget deficit of C$1.2-billion
for the 2012/2013 fiscal year, Budget 2013 forecasts a return to
balanced budgets with surpluses of C$197-million in 2013/2014,
C$211-million in 2014/2015 and C$460-million in 2015/2016, to be
achieved through a combination of tax rates increases, spending
controls, asset sales and economic growth. As may be expected,
Budget 2013 was likely influenced by both politics and policy
coming as it does just three months before the provincial election
scheduled to take place on May 14.
Tax Highlights of Budget 2013
A 1% increase in the B.C. general corporate income tax rate
effective April 1, 2013 will raise the general rate from 10% to 11%
(the small business tax rate will remain at 2.5%). This rate is
higher than the general corporate rate in Alberta (10%) but lower
than such rates in Ontario (11.5%) and Quebec (11.9%).
A temporary two-year 2.1% tax rate increase on individuals earning
more than C$150,000 a year by way of the addition of a new tax
bracket. This will raise the top tax rate on individuals from 14.7%
to 16.8%, with the combined top federal/provincial rate for B.C.
residents increasing from 43.7% to 45.8%. This measure will be
effective for 2014 and 2015 and is scheduled to expire on December
A phase-out over two years of the school property tax credit for
The introduction of a 3% minimum royalty for all natural gas wells
that qualify for the Deep Well Royalty Credit Program and the
termination of the Summer Drilling Credit Program.
A C$2 per carton increase in tobacco tax.
Increases in Medical Services Plan monthly premiums by C$2.75 per
Budget 2013 contained no new information on the impending return
to the provincial sales tax (PST) on April 1, 2013 and introduced
no significant new measures to give relief to businesses affected
by PST. This was perhaps surprising given that, in its September
2012 report, the Expert Panel on B.C.'s Business Tax
Competitiveness commissioned by the province recommended several
changes including a refundable investment tax credit equal to the
PST paid on investments in machinery and equipment. Although B.C.
corporate tax rates may be still be competitive in spite of the
announced increases, the Expert Panel's report gave clear
warnings about the effect of the PST, saying: "The return to
PST will significantly increase the cost of businesses making the
capital investments needed to remain competitive. Unless this issue
is addressed, B.C.'s businesses will face the highest effective
tax rate on new investments among the provinces in 2013." The
reintroduction of the PST is widely considered to be a significant
disadvantage for B.C. businesses.
Budget 2013 contains a brief discussion of the liquefied natural
gas (LNG) prospects for B.C. mentioned in the throne speech on
February 12. However, there are no new details on the potential
additional tax on LNG mentioned in the Ministry of Finance's
February 12 news release. The budget documents simply refer to
"a potential new B.C. LNG revenue regime designed to be
competitive with other jurisdictions".
Budget 2013 also contains a discussion of the results of the
carbon tax review that took place as part of the Budget 2013
process (as announced in Budget 2012). Budget 2013 confirms that
carbon tax rates will not be increased, the carbon tax base will
not be expanded or broadened to include industrial process or other
non-combustion emissions and the tax will remain revenue neutral.
The only changes to the regime announced in Budget 2013 are a
carbon tax relief grant for commercial greenhouse vegetable and
floriculture growers and a carbon tax exemption for farmers for
coloured motor fuels that they are currently able to purchase
exempt from motor fuel tax.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.
Emotional culture is influenced in great part by the mindset and actions of leadership, although employees also play more of a role than they may realize in creating the culture that exists in the group.
The session will be led by Dr. Robert Brooks, an award-winning author and psychologist. In his presentation, Dr. Brooks will describe the mindset and realistic practices of leaders and staff that help to nurture and sustain a culture characterized by positive emotions, satisfying, respectful relationships, a sense of meaning and ownership for one’s work, and enhanced job performance. Examples will be offered to illustrate strategies for developing a positive emotional culture in an organization.
Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).