In advance of the May 9 general election, the British Columbia Government introduced their 2017-18 budget today.
British Columbia is the only province charging residents for health care through Medical Services Plan premiums. Many, particularly larger, employers pay MSP premiums on behalf of their employees. As of January 1, 2018, a total of 2 million British Columbians will pay no premiums and the premiums of another 2 million British Columbians will be reduced by 50%. The Government will forego $953 million in premium revenue. (It should be noted that British Columbia families, with a net income of under $120,000 will need to register for premium reduction. Employer group plans will need to register for premium reduction for impacted employees.)
As reported by the Commission on Tax Competitiveness, B.C. is also the only province charging sales tax on electricity for commercial premises. The province will eliminate the PST on electricity for commercial premises in two phases foregoing more than $160 million in annual revenue. On October 1, 2017 the rate will drop by half from 7% to 3.5% and on April 1, 2019 it will be eliminated entirely. (The wholesale and retail trade is estimated to pay $21 million annually in provincial sales tax on electricity.)
As of April 1, 2017, B.C. will reduce the Small Business corporate income tax rate from 2.5% to 2.0% (foregoing $213 million in revenue).
The province ear-marked an increase of $9 million for Environmental Management Act compliance and enforcement. Improving compliance with the Recycling Regulation (one component of the EMA) has been a key RCC ask of Government.
RCC will continue to advocate for improvements in the B.C. provincial sales tax in line with the report of the Commission on Tax Competitiveness.
RCC will continue to be in contact with the BC Ministry of Environment with respect to compliance with the Recycling Regulation in an effort to ensure fairness amongst obligated producers.
A fifth consecutive surplus budget comes amidst a broader discussion in the body politic about sharing the benefits of lower provincial government debt. The Government announced expenditure increase of $3 billion over 3 years and tax reductions of about $3 billion over 3 years. B.C.’s operating debt is down but taxpayer-supported debt continues to rise resulting from a small increase in non-operating (infrastructure) debt. B.C.’s AAA credit rating and lower operating debt allow the government greater flexibility to make strategic investments.
British Columbia’s 2017 budget should be viewed in the context of the upcoming provincial general election on May 9. The budget increase for the health sector in 2017/18 is $875 million. The province is also making a $3 billion spending lift beyond the health care sector: $796 million for children, families and those in need; $740 million for the Kindergarten to Grade 12 education sector; over $700 million for first-time homebuyer initiatives; $249 million for communities and economic development; and $149 million for parks and environmental protections.
If you have any questions or concerns, please do not hesitate to contact: Greg Wilson, Director, Government Relations (B.C.), Retail Council of Canada at +1 (604) 736-0368/1-800-663-5135 or [email protected].