On February 18, 2020, British Columbia’s Finance Minister Carole James presented the 2020 budget. Budget 2020: A Balanced Plan to Keep BC Moving Forward (the “Budget”) includes no major new programs and continues on the path built in the previous years. This memo highlights items that may be of interest to plan administrators, employers, and members.
Please click here to download this article in a printable format:
Notes on the B.C. Budget
The Budget includes over $1 billion in additional funding over the fiscal plan to health care services.
B.C. Access Grant
The Government will spend a total of $41 million annually over three years to provide the new B.C. Access Grant. Effective September 2020, the B.C. Access Grant will replace current completion grants and will provide eligible students with financial assistance to access the public post-secondary education they need.
Health Infrastructure Investments
The Government will spend a total of $6.4 billion on infrastructure in the health sector over the next three years.
Key projects include the redevelopment of the Royal Columbian Hospital, the Burnaby Hospital and Cariboo Memorial Hospital, the replacement of the Burnaby Centre for Mental Health and Addictions, the replacement of the Stuart Lake Hospital in Fort St. James and the Mills Memorial Hospital in Terrace, a new patient care tower at the Royal Inland Hospital and the Penticton Regional Hospital, renewal of the Vancouver General Hospital operating rooms, and a new St. Paul’s Hospital.
Provincial Sales Tax on Soft Drinks/Pop
Effective July 1, 2020, carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners no longer qualify for the provincial sales tax exemption for human food products. The 7% sales tax will also apply to beverages dispensed through soda fountains, soda guns or similar equipment.
Tax Rate for Heated Tobacco Products
A new tax rate for heated tobacco products will be effective on April 1, 2020. This default tax of 29.5 cents per heated tobacco product will not only cover the current e-cigarettes but any product that contains tobacco and is designed to be heated but not combusted, in a tobacco heating unit to produce a vapour for inhalation.
Additionally, a dealer that intends to sell a new heated tobacco product that has not yet been authorized by the director for sale or use in B.C. will be required to inform the director of this intent no later than 90 days before the intended first sale or use of the heated tobacco product.
Income Tax Rates
Effective January 1, 2020, the tax rate on taxable income over above $220,000 will be increased from 16.8% to 20.5 percent. Personal income tax revenue is forecast to increase by 6.8 percent in 2020/21.
Training Tax Credit for Employers and Apprentices
The Budget proposes to extend the training tax credit for three years to the end of 2022.