Tax Flash Bulletin
2023 B.C. Budget Highlights
On February 28, 2023, British Columbia’s new Minister of Finance, Katrine Conroy, tabled the province’s budget for the 2023-2024 fiscal year. We have highlighted selected tax measures relevant to individuals and small businesses in British Columbia.
INDIVIDUALS
Personal Tax Rates
The budget did not propose any changes to personal income tax rates. The tax brackets continue to be indexed.
| 2022 Taxable Income | 2023 Taxable Income | Rate |
|---|---|---|
| $0 to $43,070 | $0 to $45,654 | 5.06% |
| $43,070 to $86,141 | $45,654 to $91,310 | 7.70% |
| $86,141 to $98,901 | $91,310 to $104,835 | 10.50% |
| $98,901 to $120,094 | $104,835 to $127,299 | 12.29% |
| $120,094 to $162,832 | $127,299 to $172,602 | 14.70% |
| $162,832 to $227,091 | $172,602 to $240,716 | 16.80% |
| Over $222,091 | Over $240,716 | 20.50% |
Top Combined BC and Federal Rates
| Income Type | 2022 | 2023 |
|---|---|---|
| Salary, interest, pension, foreign | 53.50% | 53.50% |
| Eligible dividends | 36.54% | 36.54% |
| Non-eligible dividends | 48.89% | 48.89% |
| Capital gains | 26.75% | 26.75% |
Top rates apply to taxable income over $240,716 and $227,091 (2022) based on known federal and B.C. rates at February 28, 2023.
Introduction of Renter’s Tax Credit
- Maximum $400 refundable tax credit for B.C. resident renters aged 19 and over
- Households with adjusted income of less than $60,000 can claim the full $400 tax credit
- A partial credit is available when income is between $60,000 to $80,000
- Rent must be paid to unrelated persons
- Effective January 1, 2023
Permanent Increase to B.C. Family Benefit
| Annual B.C. Family Benefit | Maximum Benefit Family Income < $27,345 |
Minimum Benefit Family Income < $87,533 |
|---|---|---|
| First child | $1,750 | $775 |
| Second child | $1,150 | $750 |
| Each Additonal child | $900 | $725 |
- An additional $500 maximum annual supplement will be provided to single parent families
- Both measures effective July 1, 2023
Increase to Climate Action Tax Credit
| Maximum Annual Climate Action Tax Credit | Prior | As of July 1, 2023 |
|---|---|---|
| Adult | $193.50 | $447.00 |
| Spouse or common-law partner |
$193.50 | $223.50 |
| Each Child | $56.50 | $111.50 |
- Single parents will continue to receive the spouse/partner amount for the first child in the family
- Effective July 1, 2023
Other Income Tax Measures
- Extension of the farmers’ food donation tax credit to December 31, 2026
- Extension of the interactive digital media tax credit to August 31, 2028
Consumer and Other Taxes
- Carbon tax rates increase by $15, from $50 to $65 per tonne annually until reaching $170 per tonne in 2030, effective April 1, 2023
- Increase to property tax of up to $0.03/$1,000 of assessed value for policing to recover 33 per cent of legislated costs after policy-based reductions, applicable to rural areas and municipalities with populations below 5,000
- Purchases of new purpose-built rental buildings will be exempt from the additional two per cent property transfer tax for transactions exceeding $3 million, effective January 1, 2024
- New PST exemption for automated external defibrillators (AEDs), effective March 1, 2023
- Revisions to online marketplace tax collection rules
- Services taxable when an online marketplace facilitator provides the service to facilitate the sale or provision of non-taxable services
- Rules amended to align with the place-of-supply rules used for the federal GST
- Qualifying greenhouse growers can claim a point-of-sale reduced carbon tax for purchases of natural gas and propane used for heating and generating CO2 for increased crop productivity, effective April 1, 2023
BUSINESSES
Corporate Tax Rates
The budget did not propose any changes to corporate income tax rates and it did not change the $500,000 provincial small business income threshold. The calendar year rates below reflect a December 31st year end.
| Income Type | B.C. Rate | Federal Rate | Combined Rates Calendar 2023 |
|---|---|---|---|
| General corporate | 12.00% | 15.00% | 27.00% |
| Small business | 2.00% | 9.00% | 11.00% |
| CCPC* investment | 12.00% | 38.67% | 50.67% |
| Non-CCPC investment | 12.00% | 15.00% | 27.00% |
| Manufacturing and processing income | 12.00% | 15.00% | 27.00% |
Based on known federal and B.C. rates at February 28, 2023
*Canadian Controlled Private Corporation
Reference further details on the 2023 B.C. Budget here.
This has been prepared by the Professional Wealth Advisory Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member - Canadian Investor Protection Fund.