BC’s latest budget was tabled in the legislature this afternoon. Much like the federal budget, there is not a lot of new stuff announced in the budget but a few interesting pieces caught my eye. I, of course, focus on the tax measures.
The budget introduces the BC Early Childhood Tax Benefit. This benefit will pay $55 a month to eligible families. This actually looks like really smart public policy. The benefit will be a refundable tax credit. This simple act, making the credit refundable, means that low income families who are already in a tax neutral position will benefit from the credit. If you are a low income family and not currently filing your taxes, this should really make you want to rethink that decision.
The maximum benefit of $55 a month is payable to all families with net incomes up to $100k and then is partially clawed back such that it is fully phased out by $150k in net income. Given that BC has the highest rate of child poverty in Canada it is too bad that the payment is not higher for lower income families which could be offset by an earlier clawback threshold. But overall, putting more money into the hands of families gets a thumbs up from me.
Much like the federal budget extended the Mineral Exploration Tax Credit, the BC government extended their provincial version of this credit. I have written before why mining flow through shares is stupid tax policy and you can read all about it here.
I also see that the BC government fiddled a bit with the B.C.’s Property Tax Deferment Program. I have also written about this policy before, which also ranks in my stupid tax policy list. My problem with BC’s program is that it is not means tested meaning that wealthy households that qualify derive a substantial benefit from a program meant to keep low income seniors in their homes.
The fiddling also extended to the Distant Location Tax Credit. The Greater Victoria area now qualifies as a ‘distant location’. I have to wonder if the filming of Gracepoint influenced this decision in any way. By the way, Victoria is not, in my books, distant. Also these film tax credits are just races to the bottom, which makes for bad tax policy.
So I give the government a thumbs up for the child benefit, but I don’t see many other positive tax measures (though increasing tobacco taxes is a positive IMO). What I dislike is that the special tax credits like the flow through shares piece and the property tax deferment benefit high income Canadians and need to be scrapped. Had the flow through shares credit been axed, the child benefit could have been enriched for low income households. That, my friends, is a lost opportunity.