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Michael de Jong, British Columbia Finance Minister, delivered BC’s 2017 budget this past week. The budget contained anticipated surpluses until 2019 ($295 million for 2017-18, $244 million for 2018-19, and $223 million for 2019-20) and an anticipated elimination of BC’s operating debt by 2020.
We have summarized some of the highlights of the 2017 budget below.
Corporate tax measures
- As of April 1, 2017 the Small Business corporate income tax rate will be reduced from 2.5% to 2%. This will apply on the first $500,000 of qualifying active business income earned by a Canadian Controlled Private Corporation.
- The calculation of the mining exploration tax credit (the “METC”) will now include the costs incurred after February 28, 2015 of environmental studies and community consultations.
- An extension of various tax credits including:
- Mining flow-through shares extended to the end of 2017;
- Training tax credits extended to the end of 2020; and
- Scientific Research and Experimental Development (SR&ED) extended to August 31, 2022.
Personal tax measures
- Personal income tax rate on non-eligible dividend for dividends earned during tax year 2017 has been increased to 40.95% (from 40.61%). All other personal tax rates will remain the same (http://www.manningelliott.com/resources).
- The MSP rate will remain at $75/month per adult and as of January 1, 2018 MSP premiums will be reduced by 50% for households with a family net income up to $120,000.
- The threshold for the first time homebuyer’s exemption on the purchase of residential properties will be increased to $500,000 (increased from $475,000) for registrations on or after February 22, 2017 providing a savings of up to $8,000.
- As previously announced, the threshold of the value of a principal residence, which allows the owner to claim 100% of the Home Owner Grant has been increased to $1.6 million (from $1.2 million) for the 2017 year.
- Parents with children between the ages of 5 to 17 will receive a $250 non-refundable tax credit for each child during tax years 2016 to 2018.
- The taxes on cigarettes will be increased to $49.40 (from $47.80) per carton of 200 cigarettes as of October 1, 2017.
Other interesting tax measures
- PST on electricity will be gradually phased out with 50% reduction effective October 1, 2017 and an elimination of the PST on electricity in April 2019.
- The budget has provided more information sharing between the property tax assessment and income tax departments. This will provide income tax administrators with access to property assessment information.
For further information about the 2017 BC Budget, please contact Sheryne Mechlai, CPA, CA, TEP or Maryam Charehsazan, CPA, CA of the Manning Elliott Tax Team at 604-714-3600.
The above content is believed to be accurate as of the date of posting. Canadian Tax laws are complex and are subject to frequent changes. Professional tax advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained therein.