Canada: British Columbia Budget Summary – 2019

On February 19th, 2019, British Columbia Finance Minister, Carole James, announced the 2019 British Columbia Budget. No changes were made to the existing personal and corporate tax rates. Highlights of the Budget are summarized below.

INCOME TAX MEASURES

B.C. Child Opportunity Benefit Announced

Effective October 1, 2020, the new B.C. Child Opportunity Benefit will be combined with the early childhood tax benefit into a single new benefit, and will support families with children under the age of 18. The early childhood tax benefit previously only applied to children under the age of 6, and this new refundable tax credit could provide families with the following benefits.

  • 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 new 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 new benefit is phased out at a rate of 4% of family net income over $80,000. The Province will index both the $25,000 and $80,000 thresholds to inflation in subsequent years. The net family income level for the benefit to completely phase out is $97,500 for a family with one child and $114,500 of family net income for a family with two children.

Climate Action Tax Credit Enhanced

The existing Climate Action Tax Credit has been enhanced with following changes:

  • Effective July 1, 2019, the maximum annual tax credit will be increased to $154.50 per adult, and to $45.50 per child.
  • Effective July 1, 2020, the maximum annual tax credit will be increased to $174 per adult, and to $51 per child.
  • Effective July 1, 2021, the maximum annual tax credit will be increased to $193.50 per adult, and to $56.50 per child.

Single-parent families will continue to receive the adult amount for the first child in the family.

Small Business Venture Capital Tax Credit Program Enhanced

The Budget proposes to enhance the Small Business Venture Capital Tax Credit program with several changes, which are listed below.

  • Effective for 2019 and subsequent years, the annual tax credit limit that an individual can claim for investments made after February 19, 2019, is increased to $120,000 from $60,000.
  • Effective February 20, 2019, the maximum amount that eligible business corporations can raise through the tax credit program is increased to $10 million from $5 million.
  • Effective February 20, 2019, advanced commercialization is added as an eligible business activity. The activity is limited to business outside the Metro Vancouver Regional District and Capital Regional District.
  • Effective February 20, 2019, eligible small businesses and eligible business corporations can engage in activities related to scaling up their business after two years in the tax credit program.
  • Effective February 20, 2019, companies are eligible for a reduction in the amount they are required to reimburse the government if they exit the tax credit program after two years, instead of after three years.
  • Effective February 20, 2019, share transfers are permitted to a Tax-Free Savings Account and equity purchases with a Tax-Free Savings Account are eligible for tax credits.
  • Effective March 2, 2019, investments in convertible equity issued by an eligible business corporation can qualify for a tax credit.

Training Tax Credits Extended

The Training Tax Credits for both employees and apprentices are extended for one year to the end of 2019.

Farmers' Food Donation Tax Credit Extended

The Farmers' Food Donation Tax Credit is extended for one year to the end of 2020.

Shipbuilding and Ship Repair Industry Tax Credit Extended

The Shipbuilding and Ship Repair Industry Tax Credit is extended for three years to the end of 2022.

Pension Tax Credit Expanded

Effective for 2015 and subsequent tax years, the Pension Tax Credit is expanded to apply in respect of certain retirement income security benefits paid to veterans.

Calculation of Tax on Split Income Adjusted

Effective for 2018 and subsequent tax years, the Disability Tax Credit can be applied in calculating the tax on split income.

Calculation of Medical Expense Tax Credit Adjusted

Effective for 2018 and subsequent tax years, split income can be included in the income threshold for calculating the Medical Expense Tax Credit.

Mining Flow-Through Share Tax Credit

The Mining Flow-Through Share Tax Credit is made permanent, effective January 1, 2019

Mining Exploration Tax Credit

The Mining Exploration Tax Credit is made permanent upon royal assent of enacting legislation.

Provincial Sales Tax Measures

Designation of Clarify Tax Collection, Remittance and Reporting Obligations for Sales and Leases Involving Agency Authorized

Effective on royal assent, the Provincial Sales Tax Act is amended to authorize a designation to streamline tax collection, reporting and remittance requirements for sales or leases involving agency. The following changes are included in the Budget.

  • When a principal uses an agent to make a sale or lease, or when a billing agent is used to collect payments, the principal and agent can jointly designate a single party to be responsible for tax collection, reporting and remittance obligations.
  • For sales made by auction, an auctioneer acting as agent is automatically designated as the party responsible for collecting, reporting and remitting tax unless the parties jointly elect to assign the obligations to the principal.

For more information on the 2019 British Columbia Budget, please visit the Government of British Columbia website:

https://www.bcbudget.gov.bc.ca/2019/download.htm

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.

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