British Columbia Budget 2017
B.C. Budget 2017 – Highlights
On February 21st, 2017, the B.C. Finance Minister, Michael de Jong, tabled the 2017 provincial budget.
The government has once again delivered a balanced budget with a predicted surplus of $295 million for 2017.
For businesses, the budget delivers:
- a decrease in the small business corporate income tax rate from 2.5% to 2% effective April 1, 2017
- enhanced tax credits for the tech sector which will be revealed at the BC Tech Summit in March
- extension of the SR&ED tax credit. In 2014, the provincial budget extended the SR&ED tax credit for 3 years, meaning that all eligible activities performed prior to September 2017 would be included in the calculation of the provincial credit. The 2017 budget extends the tax credit for five years to August 31, 2022
- the mining flow-through share tax credit that allows individuals who invest in flow-through shares to claim a non-refundable tax credit equal to 20% of their B.C. flow-through mining expenditures, that was to expire at the end of 2016 has been extended to the end of 2017
- expansion of the mining exploration tax credit to include costs incurred for environmental studies and community consultation
- the training tax credits are extended to the end of 2020
- an extension of the BC Book Publishing Tax Credit to March 31, 2019. This is a refundable tax credit for eligible book publishing corporations that carry on business in B.C.
For individuals, the budget delivers:
- an increase in the dividend tax rate for non-eligible dividends as a result of the reduction in the dividend tax credit. Currently the top marginal tax rate on non-eligible dividends is 40.61%. With the increase the new top marginal rate will be 40.95%
- the anticipated 4% increase in MSP premiums will not be implemented.
- effective January 1, 2018, MSP premiums for households with annual family net income of up to $120,000 will be cut by 50%
- the income threshold for exemption from MSP premiums increases by $2,000
- a new volunteer firefighter and search and rescue volunteer tax credit of $3,000 has been introduced. The credit is available to individuals who provide at least 200 hours of volunteer service to a volunteer fire department, an eligible search and rescue organization or a combination of both. The credit will provide a tax benefit of up to $151.80 per eligible individual.
- A new back-to-school tax credit of $250 per child to individuals with school age children (5 to 17 years of age) for 2016 to 2018. The credit will provide a tax benefit of up to $12.65 per child.
For students, the budget delivers:
- a reduction in the BC Student Loan interest rate from prime plus 2.5% to prime
- elimination of the education tax credit in 2018. Unused education amounts that have been carried forward from previous years will still be available to claim in 2018 or carried forward to subsequent tax years.
- PST on electricity to be phased out beginning with a 50% cut effective October 1, 2017 and the remainder phased out by April 2019
- An increase in the fair market value threshold for eligible residential property under the First Time Home Buyer’s Program from $475,000 to $500,000 and the partial exemption threshold from $500,000 to $525,000.
- The threshold for phase out of the Home Owner’s Grant is increased from $1.2 million to $1.6 million. If property value is over the threshold the Home Owner Grant is reduced by $5 for every $1,000 of assessed value in excess of the threshold.
- The Income Tax Act and Home Owner Grant Act have been amended to allow for information sharing between the two acts. The Income tax Act has been amended to allow income tax administrators access to assessment data.
If you have questions about the budget or would like help in assessing the changes and their affect on your business or personal finances please contact one of our advisors.