Year End Tax Tasks for Small Businesses

10 things you need to know about B.C. Budget 2017

Tax relief and spending highlight budget ahead of spring election.

1. MSP Reductions

Medical Services Plan premiums will be cut in half starting, Jan. 1, 2018, for households with an annual net income of up to $120,000.

The B.C. Government says the reduction will mean about two million B.C. residents will see their premiums cut in half — a savings of about $900 per year for a typical family of four.

However, employers already cover MSP premium costs for some of those individuals or families. The province says the changes are a first step to eventually eliminating MSP premiums.

2. PST Cut on Hydro

The PST on electricity will be eliminated over the next two years for businesses across the province.

Starting Oct. 1, 2017, the tax rate on electricity for businesses will drop to 3.5 percent from seven per cent. By April of 2019, the PST will be dropped entirely from electricity bills for businesses.

The exemption will also apply to municipalities, hospitals and schools. Residential and farm customers already do not pay PST on electricity.

3. Education

The province will spend $320 million over the next three years on interim funding for K-12 education pending the conclusion of a final agreement with the B.C. Teachers’ Federation on class size and composition.

Negotiations are still ongoing to reach a final deal as ordered by the Supreme Court of Canada. Another $9 million over three years will go towards keeping rural schools open.

4. Balanced Budget

The budget includes $50.2 billion in spending for 2017-18 and is the fifth-consecutive balanced budget for the province.

Finance Minister Mike de Jong says successive balanced budgets have provided some flexibility to fund priorities.

The province plans to spend a record $13.7 billion over the next three years on capital investments in schools, roads, hospitals and public safety.

5. Child Welfare

The Ministry of Children and Family Development will receive an additional $287 million over the next three years to support children and youth, including $120 million to start addressing the recommendations of the Grand Chief Ed John Report on Indigenous Child Welfare.

The ministry will receive an extra $45 million over three years to add resources for mental health counselling and treatment for children. Another $12 million will go toward adding up to 28 specialized addiction treatment beds for youth.

6. Corporate Tax Cut

The corporate tax rate for small businesses will be reduced to two per cent from 2.5 per cent. The finance minister says that makes it the second lowest in the country behind Manitoba.

7. First-time Home Buyers

The threshold for the first-time home buyer’s program will be increased to $500,000 from $475,000.

The program saves first-time buyers up to $8,000 in property transfer tax on the purchase of their first home.

8. Daycare Spaces

Up to 2,000 new child care spaces will be created in 2017-18 at a cost of $20 million. Those spaces will be in addition to the province’s goal of creating 13,000 new child care spaces between 2014 and 2020.

9. Break on Student Loans

The interest rate on student loans will be reduced from prime plus 2.5 per cent to just prime starting in August 2017.

10. Prosperity Fund

The Prosperity Fund, initially designed to be filled with revenues from an LNG industry that has yet to materialize, will receive a $400 million boost from the 2016-17 surplus. That adds to an investment of $100 million in the 2016 budget.

(Source: CBC News)