Following much anticipation, on September 10th the new BC provincial government announced their first budget.
The government kept its election promise and lowered the small business corporate income tax rate from 2.5% to 2%. While this is a step in the right direction there is still room for improvement; BC should look to Manitoba, who has maintained a 0% small business tax rate since 2010.
The government also expanded on their commitment to phase out the provincial sales tax on electricity. Starting this fall, PST on electricity for all businesses will be cut by 50% before it is fully eliminated by April 2019.
Additionally, the Minister of Finance has committed to balanced budgets for the next three years.
Beginning April 2018, the carbon tax rate in BC will increase $5 annually until 2021. Since the introduction of the carbon tax, BC has lead ahead of other jurisdictions. However, affordability is a growing concern, and this is the wrong time to be increasing business costs.
The September budget also made mention of one of BC’s most discussed topics: a $15 minimum wage increase. While details were not outlined, the budget did highlight that they will appoint a Fair Wages Commission to build a pathway to reaching a minimum wage of at least $15 an hour.
The new carbon tax alone will bring in an additional $1.2 billion over three years. Revenue neutrality, a policy that requires all revenues from carbon taxes be used to reduce other taxes, is being abandoned which raises concern. The government will now have the ability to spend carbon tax revenues however they see fit.
Spending is up significantly in this budget, which made no mention of several large policies that were campaigned on, such as universal childcare and renters rebates. It may become a concern how government will raise additional revenues to pay for future policies.
Your thoughts on these issues matter!
CFIB will be releasing a new survey at the end of September focused on policies in the new budget. Have your voice heard!