On February 28, 2023, the B.C. Minister of Finance announced the province’s 2023 budget. This article highlights the most important things you need to know about this budget.
No Changes To Corporate or Personal Tax Rates
There are no changes to the province’s personal or corporate tax rates in Budget 2023.
Tax Credits Changes
Budget 2023 extends two corporate tax credits – the Farmers’ Food Donation Tax Credit until 2026 and the Interactive Digital Media Tax Credit to August 31, 2028.
As of July 1, 2023, the maximum annual Climate Action Tax Credit will be increased to $447 for an adult, $223.50 for a spouse or common-law partner, and $111.50 per child.
Renters with household incomes under $60,000 can apply for a new refundable Renter’s Tax Credit up to a maximum of $400. Renters with a household income of over $60,000 and less than $80,000 are eligible for a reduced credit.
Increased B.C Family Benefit
The B.C Family Benefit will increase as of July 1, 2023:
• The maximum annual benefit is now $1,750 for a family’s first child, $1,100 for a second child, and $900 for each subsequent child for families with an adjusted net income of under $27,354.
• The minimum benefit will now be $775 for a family’s first child, $750 for a second child, and $725 for each subsequent child for families with an adjusted family net income of more than $27,354 and less than $87,533.
The budget also includes a maximum annual supplement of $500 to single-parent families on top of the maximum annual benefit.
Carbon Tax Changes
Effective April 1, 2023, carbon tax rates will increase annually by $15 per tonne of carbon dioxide equivalent emissions. Qualifying commercial greenhouse growers will be eligible for a reduced point-of-sale reduced carbon tax on purchases of natural gas and propane.
The 2023 budget verifies that B.C. plans to implement an output-based pricing system (OBPS) that meets updated federal requirements to replace the current carbon pricing as of April 1, 2024.
Other Tax Changes
The budget introduces new taxation rules for online marketplace services and now excludes automated external defibrillators from provincial sales taxes.
Budget 2023 indicates refund rates for International Fuel Tax Agreement licensees will increase effective April 1, 2023. New purpose-built rental buildings will be exempt from the further 2% property transfer tax applied to transactions that exceed $3 million as of January 1, 2024.
Healthcare and Housing Spending
Budget 2023 contains several commitments to support health care and housing:
Various contraception options, including birth control prescriptions, will be free as of April 1, 2023.
One billion dollars has been committed to new treatment beds and treatment support for mental health and addictions.
$2.3 billion will go towards enhancing core services, recruiting staff, implementing a new pay model for family doctors, and fighting COVID-19.
In housing, $1.1 billion will be used to purchase land near transit hubs and improve student housing.
Over $569 million will be allocated to building projects and $454 million towards homelessness support and response programs.
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Wondering how this year’s budget will impact your finances or your business? We can help – give us a call today!