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B.C. Budget Update September 1, 2009


Please find below a short summary of the B.C. Budget Update released September 1, 2009:

  • The re-elected provincial government reinforced its commitment to Health, Education and Social Services with this spending budget.
  • The budget proposes major infrastructure spending on roads, health and education.
  • One of the measures announced in the budget is to bring in full day kindergarten starting September 2010.
  • There will also be increased tax training credits for businesses that take on apprentices. These credits will double to $4,000 per apprentice.
  • The basic personal tax credit will be increased to $11,000 from $9,373 effective January 1, 2010. B.C.’s small business corporate tax rate was previously reduced to 2.5% and it is proposed that this will be eliminated by April 1, 2012. B.C.’s general corporate tax rate will be reduced to 10.5% in 2010 from 11% with a further reduction down to 10% planned for 2011.

Harmonized Sales Tax (HST)
The budget also expands on how the harmonized sales tax effective July 1, 2010 will help the B.C. economy in many ways including; increased competitiveness for B.C. businesses in that they will no longer have the PST imbedded in their costs, this efficiency will allow businesses to expand. The compliance cost in dealing with one sales tax versus two will be very significant not only in direct costs in complying, but also additional costs related to audits.

The rate will be 12% - the lowest in Canada. Rebates announced to date include:

  • A point of sale rebate on home energy
  • Up to a $20,000 rebate on the purchase of a new home
  • Rebates on motor fuels 
  • Books 
  • Children sized clothing
  • Feminine hygiene protection products
  • Rebate for municipalities, charities and qualifying non profits - on average, they will not not be requird to pay any additional PST under the HST system than they would have previously.

The government also announced they will have an HST credit for low income families that will be paid when British Columbians file their tax returns.

There will also be a temporary delay for certain businesses with taxable sales in excess of $10 million dollars to claim input tax credits.

The federal government will also be providing the province with $1.6 billion in transitional funding to assist with the implementation of the HST.

For more information on the B.C. budget updates, please feel free to contact me, or your local MNP advisor.