February 23, 2018
BC Budget 2018 – More Proposed Changes
MSP, PharmaCare, Child Care, Education, Food & Luxury Cars
The NDP Government in British Columbia released its BC Budget for 2018 on Tuesday, February 20th. Below, we’ve listed some of the key tax measures that will directly affect British Columbians including:
An employer funded health tax will be introduced in 2019 with the aim of replacing MSP premiums by 2020. MSP premiums were already reduced 50% effective January 1, 2018.
Companies with annual payrolls less than $500,000 are exempt from the tax.
The tax as a percentage of payroll increases for every $250,000 increment over $500,000. The tax will range from 0.98% for payrolls between $500,000 and $750,000 to a maximum rate of 1.95% for payrolls over $1,500,000.
Fair PharmaCare Program
In order to make pharmaceuticals more affordable, deductibles for prescriptions will be eliminated for families with annual incomes less than $30,000.
Families with an annual incomes between $30,000 and $45,000 will also see their deductibles reduced.
Affordable Child Care
Families with infants and toddlers in a licensed child care facility will have a reduction in their child care fees if their family income is below $111,000.
Families earning $45,000 or less will save up to $1,250 per month, with the benefit decreasing as family income increases.
An additional fee reduction up to $350 will apply for children under the age of six in licensed child care facilities.
Increased Funding for BC’s Agri-Food Sector
Increased funding of $29 million over three years will support a variety of initiatives in the agri food sector that are part of the Grow BC, Feed BC and Buy BC program.
The budget outlined several initiatives that will be supported by the funding including:
Investments to assist farmers with start-up loans
Support for the fruit and nut industry
Revitalizing the Agricultural Land Reserve
Enhancing the Buy BC program
Support for the development of a Food Innovation Centre at UBC that will help small-scale processors enhance their potential for commercialization
Funding for Indigenous Skills Training
Funding of $30 million over three years will be budgeted for the Ministry of Advanced Education, Skills, and Training to continue the Indigenous Skills Training Development Fund. Previously this program only had temporary funding.
An additional $2 million has been provided to the University of Victoria to begin an Indigenous law program.
Expansion of the Tuition Waiver Program
The Ministry of Advanced Education, Skills and Training will receive $6 million over three years to expand post-secondary tuition waivers for youth aged 19 to 26 who spent at least 24 months in care. Youth who qualify for this tuition waiver program will no longer have to pay tuition at any BC public post-secondary institution or Native Education College. Previously this program only applied at 11 public institutions.
Agreements with Young Adults
$30 million over three years has been budgeted to increase support for young adults aging out of foster care that are attending school, rehabilitation, vocational or life skills programs. Young adults aged 19 to 26 can receive this monthly support, which will increase to a maximum of $1,250 from $1,000 and will be provided for a full calendar year (as opposed to the current 8 months) for those enrolled in multi-year programs.
Luxury Vehicle Tax
And finally, just in case you were thinking of purchasing a vehicle with a price tag over $125,000, you should consider expediting the purchase process. Once the budget legislation is passed in the spring, vehicles with a price tag over $125,000 will have a 15% provincial sales tax levy, while vehicles over $150,000 will have a 20% provincial sales tax tacked on. When combined with GST, this will add 25% to the cost of any vehicle over $150,000.
Should you have any questions regarding the 2018 BC Budget please contact the Manning Elliott Tax Team for more information.
The above content is believed to be accurate as of the date of posting. Tax laws are complex and are subject to frequent changes. Professional advice should be sought before implementing any tax planning. Manning Elliott LLP cannot accept any liability for the tax consequences that may result from acting based on the information contained therein.