2019 BC Budget Commentary
Finance Minister Carole James tabled the 2019 British Columbia provincial budget on February 19, 2019.
The budget projects surpluses of $274 million for the 2019-2020 fiscal year, $287 million for the 2020-2021 fiscal year and $585 million for the 2021-2022 fiscal year.
On the income tax side, there were no changes to personal or corporate income tax rates. The government introduced, increased and extended certain tax credits.
The following pages are a summary of the changes announced in the budget. Please note that these changes are still proposals until passed into law by the provincial government.
Personal Tax Matters
Tax brackets and personal credit amounts have been indexed by 2.6% for 2019. The table below shows British Columbia tax rates and brackets for 2019.
Taxable income range
2019 tax rates
first $40,707
5.06%
$40,708 – $81,416
7.70%
$81,417 – $93,476
10.50%
$93,477 – $113,506
12.29%
$113,507 – $153,900
14.70%
$153,901 and over
16.80%
The table below shows the 2019 combined federal and provincial highest marginal tax rates for various types of income.
Type of income
2019 combined tax rates
Regular income
49.80%
Capital gains
24.90%
Eligible dividends
31.44%
Non-eligible dividends
44.64%
BC Child Opportunity Benefit
Effective October 2020, the budget proposes to replace the BC Early Childhood Tax Benefit with the new BC Child Opportunity Benefit, a refundable tax credit applicable to families with children under the age of 18.
The maximum annual benefit is $1,600 for a family’s first child, $1,000 for a second child and $800 for each subsequent child under the age of 18. The benefit is reduced by 4% of family net income over $25,000 until it is equivalent to $700 for the first child, $680 for the second child and $660 for each subsequent child under the age of 18. The new benefit is phased out at a rate of 4% of family net income over $80,000. For a family with two children, the new benefit will be fully phased out at $114,500 of family net income.
The $25,000 and $80,000 thresholds will be indexed to inflation.
Climate Action Tax Credit
The maximum annual climate action tax credit is increased as follows:
- Effective July 1, 2019, to $154.50 from $135 per adult and to $45.50 from $40 per child
- Effective July 1, 2020, to $174 per adult and to $51 per child
- Effective July 1, 2021, to $193.50 per adult and to $56.50 per child.
Mining Flow-Through Share Tax Credit
Effective January 1, 2019, the mining flow-through share tax credit is made permanent.
Farmers’ Food Donation Personal Tax Credit
The farmers’ food donation personal tax credit is extended for one year, to the end of 2020.
Mining Exploration Personal Tax Credit
Effective on royal assent, the mining exploration personal tax credit is made permanent.
Pension Tax Credit
Effective for 2015 and subsequent years, the pension tax credit is expanded to apply in respect of certain retirement income security benefits paid to veterans.
Disability Tax Credit, Medical Expense Tax Credit and Split Income
Effective for 2018 and subsequent tax years, the disability tax credit can be applied in calculating the tax on split income and split income can be included in the income threshold for calculating the medical expense tax credit.
Download full summary here, including corporate tax matters.
Finance Minister Carole James tabled the 2019 British Columbia provincial budget on February 19, 2019.
The budget projects surpluses of $274 million for the 2019-2020 fiscal year, $287 million for the 2020-2021 fiscal year and $585 million for the 2021-2022 fiscal year.
On the income tax side, there were no changes to personal or corporate income tax rates. The government introduced, increased and extended certain tax credits.
The following pages are a summary of the changes announced in the budget. Please note that these changes are still proposals until passed into law by the provincial government.
Personal Tax Matters
Tax brackets and personal credit amounts have been indexed by 2.6% for 2019. The table below shows British Columbia tax rates and brackets for 2019.
|
Taxable income range |
2019 tax rates |
|
first $40,707 |
5.06% |
|
$40,708 – $81,416 |
7.70% |
|
$81,417 – $93,476 |
10.50% |
|
$93,477 – $113,506 |
12.29% |
|
$113,507 – $153,900 |
14.70% |
|
$153,901 and over |
16.80% |
The table below shows the 2019 combined federal and provincial highest marginal tax rates for various types of income.
|
Type of income |
2019 combined tax rates |
|
Regular income |
49.80% |
|
Capital gains |
24.90% |
|
Eligible dividends |
31.44% |
|
Non-eligible dividends |
44.64% |
BC Child Opportunity Benefit
Effective October 2020, the budget proposes to replace the BC Early Childhood Tax Benefit with the new BC Child Opportunity Benefit, a refundable tax credit applicable to families with children under the age of 18.
The maximum annual benefit is $1,600 for a family’s first child, $1,000 for a second child and $800 for each subsequent child under the age of 18. The benefit is reduced by 4% of family net income over $25,000 until it is equivalent to $700 for the first child, $680 for the second child and $660 for each subsequent child under the age of 18. The new benefit is phased out at a rate of 4% of family net income over $80,000. For a family with two children, the new benefit will be fully phased out at $114,500 of family net income.
The $25,000 and $80,000 thresholds will be indexed to inflation.
Climate Action Tax Credit
The maximum annual climate action tax credit is increased as follows:
- Effective July 1, 2019, to $154.50 from $135 per adult and to $45.50 from $40 per child
- Effective July 1, 2020, to $174 per adult and to $51 per child
- Effective July 1, 2021, to $193.50 per adult and to $56.50 per child.
Mining Flow-Through Share Tax Credit
Effective January 1, 2019, the mining flow-through share tax credit is made permanent.
Farmers’ Food Donation Personal Tax Credit
The farmers’ food donation personal tax credit is extended for one year, to the end of 2020.
Mining Exploration Personal Tax Credit
Effective on royal assent, the mining exploration personal tax credit is made permanent.
Pension Tax Credit
Effective for 2015 and subsequent years, the pension tax credit is expanded to apply in respect of certain retirement income security benefits paid to veterans.
Disability Tax Credit, Medical Expense Tax Credit and Split Income
Effective for 2018 and subsequent tax years, the disability tax credit can be applied in calculating the tax on split income and split income can be included in the income threshold for calculating the medical expense tax credit.
Download full summary here, including corporate tax matters.