2020 BC Budget Highlights

BC’s Finance Minister, Carole James, delivered the province’s 2020 budget on
February 18th, 2020. The budget projects:

• For 2020, a surplus of $227 million
• For 2021, a surplus of $179 million
• For 2022, a surplus of $374 million

Personal Tax Changes

Personal Income Tax Rates
Effective January 1st, 2020, a new top British Columbia personal income tax rate of 20.5% (up from 16.8%) will apply to individuals with taxable income exceeding $220,000. Consequently, the charitable donation tax credit will increase to 20.5% for charitable donations over $200 for taxpayers in the new bracket.

Homeowner Grant
BC will decrease the threshold for the phase-out of the homeowner grant, from $1.65 million to $1.525 million. For properties above the threshold, the grant is reduced by $5 for every $1,000 of assessed value, in excess of the threshold.

Real Property Contractors
Effective February 19th, 2020, the budget allows real property contractors, who perform value-added work to goods and then install those goods into real property outside the province, to apply for refunds of PST paid on those goods.

Training Tax Credit
Extended to the end of 2022.

Corporate Tax Changes

Film Incentive BC and Production Services Tax Credit
Effective February 19th 2020, the budget increases the accreditation certificate fee for the Production Services Tax Credit, from $5,500 to $10,000.

Production Services Tax Credit Pre-Certification Notification Introduced
Effective July 1st 2020, corporations intending to claim the production services tax credit must notify the certifying authority of their intent within 60 days of first incurring an expenditure that is eligible for the tax credit.

Training Tax Credit
Extended to the end of 2022.

Farmers’ Food Donation Tax Credit
Extended to the end of 2023.

New Mine Allowance
Effective date to be specified; extended to the end of 2025.

PST Registration Requirement
Effective July 1st, 2020, Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services, will be required to register as tax collectors, if specified B.C. revenues exceed $10,000. Additionally, all Canadian sellers of vapour products will be required to register if these products are to be delivered to B.C. consumers.

Sales Tax Changes

Carbonated Beverages
Effective July 1st 2020, carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners will no longer qualify for the PST exemption for food products. PST will also apply to beverages that are dispensed through soda fountains, soda guns or similar equipment, along with all beverages dispensed through vending machines (except vending machines wholly dedicated to dispensing beverages, other than, sweetened carbonated beverages; e.g., coffee or water machines).

Tax Rate for Heated Tobacco Products Introduced
Effective April 1st, 2020, a default tax of 29.5 cents per heated tobacco product is introduced. For specific heated tobacco products, this default can be changed by regulation. A heated tobacco product is a product that contains tobacco and is designed to be heated, but not combusted, in a tobacco heating unit to produce a vapour for inhalation.

Property Transfer Tax
Exemption from Additional Property Transfer Tax for Certain Canadian-Controlled Limited Partnerships Introduced
Effective on a date to be specified by regulation, a new exemption from additional property transfer tax will be introduced for qualifying Canadian-controlled limited partnerships. This exemption will treat Canadian-controlled limited partnerships in a manner more consistent with Canadian-controlled corporations. It will ensure that new housing developments are treated similarly, irrespective of whether the development is being undertaken by a Canadian-controlled corporation or Canadian-controlled limited partnership.

The entire BC Budget can be found at https://www.bcbudget.gov.bc.ca/2020/downloads.htm#gotoNewsReleases