Retailers generating $500,000 a year in taxable income and retailers selling tobacco will be directly affected by the budget. Noticeably absent from the budget is any reference to the additional cost B.C. businesses will bear with the return to the PST on April 1, 2013. The government’s relatively modest growth estimates are consistent with the growth expectations of retailers.
B.C. Finance Minister Michael de Jong promises to generate a balanced budget and projects annual surpluses until 2015-2016. Following successive deficits, Minister de Jong believes B.C. will achieve surpluses based on an average annual increase in spending of 1.5 per cent and increases in annual revenue of 3 per cent over the three-year fiscal plan. Projected surpluses are: $197 million in 2013-14, $211 million in 2014-15, and $460 million in 2015-16. B.C.’s debt is forecast to increase from $62.7 billion in 2013-14 to $69.4 billion in 2015-16. However, Balanced Budget 2013 forecasts B.C.’s tax-supported debt-to-GDP ratio will peak at 18.3 per cent in 2014-15, and decline to 18.1 per cent in 2015-16. The fiscal plan also includes contingencies of $225 million each year over the three-year plan.
Annual revenue from sales tax is expected to increase modestly at an average of 1.4 per cent over the next three years due to the impacts of returning to the PST on April 1, 2013. Tax measures will provide an additional $327 million in revenue. Between 2013 and 2015 more than 100 surplus government properties (less than 2 per cent of provincial assets) will be sold to generate revenue of $625 million. Spending priorities are focused on health, education and the family with the introduction of the B.C. Training and Education Grant, and the new B.C. Early Childhood Tax Benefit.
To view the Finance Minister’s speech and more details on the budget, please click here.
Specific Tax Measures:
- The general corporate tax rate will increase from 10 per cent to 11 per cent, effective April 1, 2013,
- There will be a temporary two-year increase of 2.1 per cent (to 16.8 per cent) in personal income tax for individuals earning more than $150,000, effective January 1, 2014,
- The tax on tobacco will increase $2 per carton, effective October 1, 2013,
- The school property tax credit for light industry (class 5) will be phased out, effective for the 2013 year,
- Medical Services Plan premiums will increase by about 4 per cent, effective January 1, 2014.
We will continue to work with B.C. government to push for compensation for retailers for changes resulting from the reintroduction of the PST.
If you have any comments or questions regarding British Columbia’s 2013 Provincial Budget, please contact RCC’s B.C. representative Mark Startup at 604.730.5252 or toll-free at 1(800) 663-5135 x 307 or [email protected].