B.C. budget: Province unveils new taxes on soft drinks, high earners

Finance Minister Carole James is imposing new taxes on millionaires and soft drinks as the B.C. government continues to invest in education, housing, climate action and supports for families.

James announced the new taxes in a budget speech Tuesday that unveiled a needs-based grant for post-secondary students along with more money for the K-12 school system and the fight against homelessness.

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“This really is a budget that builds a stronger British Columbia, not for the few at the top, but in fact for all British Columbians,” she said.

The new tax on people earning more than $220,000 a year will inject about $216 million a year into government coffers. Nearly half that revenue will come from people making more than $1 million a year, James said.

In addition, B.C. will start charging the seven per cent provincial sales tax on sweetened, carbonated drinks.

The new tax, which takes effect July 1, will bring in about $37 million a year.

“Research shows that teens between the ages of 14 and 18 are the top consumers of pop,” James said. “This is a step that health professionals and an all-party committee have long supported, because this is about keeping young people healthy while taking in a bit of revenue to continue to pay for enhanced health care services for everyone.”

As well, the government will collect $11 million a year by requiring Netflix and other companies that sell more than $10,000 worth of software and telecommunication services to start collecting provincial sales tax.

The Opposition Liberals slammed the NDP, saying it is delivering a “tax and spend” budget with no plan to grow the economy. “You’ve got to ask yourself: ‘Am I better off today? Because I was promised affordability, and it’s just not there,’ ” said critic Stephanie Cadieux. She said the stand-pat budget proves that “the NDP has basically run out of money. They’re going to hold the line but that means not delivering on any new goodies.”

Cadieux said that the government promised to solve everybody’s housing challenges during the election campaign, but failed to deliver its $400 renters rebate.

“It’s not in this budget, it wasn’t in the budget before that, but they promised it in the election. And rents have gone up and rents are going to keep going up.”

The B.C. Business Council of B.C. complained that the budget, although balanced, will do nothing to encourage new companies to invest in B.C., while the new tax on top earners adds to the risk that head offices will leave the province.

“We think it’s a mistake,” said Jock Finlayson, the council’s executive vice-president. “It won’t raise as much revenue as they’re predicting and it’s a bit of a shot across the bow, I think, to business that, even though we’re trying to work constructively with this government, we’re not having much success.”

The Canadian Centre for Policy Alternatives, by contrast, welcomed the tax on top income earners, but felt James was “over cautious” and could have done more for those in need by raising welfare and disability rates.

“We’re a very rich province,” said policy analyst Alex Hemingway. “We’re in a position where we could increase our social investments, our infrastructure investments in a way that would meet urgent needs that are facing the province.”

Among the budget’s spending highlights over three years:

• $24 million on a new needs-based grant for post-secondary students that the government says will provide assistance to more than 40,000 students starting in September. Students will receive up to $4,000 to help with tuition.

• $50 million to fight homelessness by adding 505 new shelter spaces across the province and opening two new 60-bed “navigation centres” that will help people get access to housing-placement services.

• $339 million on the K-12 system to deal with rising enrollment, including 5,100 new students expected to enter the public system in September.

• $131 million to manage income and disability caseloads.

• $20 million to increase the earning exemption for people on income assistance, beginning next January. A person receiving disability assistance will be able to earn an extra $3,000 a year for a total of $15,000 without having the money deducted from assistance payments.

• $419 million for the province’s CleanBC program to pay for climate-action initiatives such as incentives that help people buy electric vehicles and install home charging stations.

As forestry workers gathered outside the legislature, James acknowledged problems facing B.C.’s forest industry and pledged $13 million over three years to help revitalize the sector and to boost efforts to convert wood to biofuels, textiles or other products.

But critics said the budget fell short of delivering much-needed help.

“Forestry’s challenge is there doesn’t seem to be any urgency to the reaction [from government]. There is support for workers but I’m not seeing support for industry,” said Andrew Wynn-Williams, B.C. vice president of the Canadian Manufacturers and Exporters.

“I look at the overall picture and I see very little support for the forest industry and for manufacturing in general.”

The B.C. Teachers’ Federation was pleased to see increased investment in the public school system, but expressed concern about lack of money to deal with an ongoing shortage of teachers, particularly in northern B.C.

“We’re seeing a significant shortage in the North Coast, North Central and Peace regions of our province where hundreds of uncertified folks are currently working in classrooms,” said Teri Mooring, union president.

Environmental organizations welcomed investments in CleanBC but said the budget fails to adequately address the climate crisis.

“Environment, climate change — they remain backburner issues for the B.C. government,” said Torrance Coste of the Wilderness Committee.

James said the government plans to spend a record $23 billion in taxpayer-supported capital spending over three years to build roads, schools, hospitals, housing and other projects across the province.

“The scale of change is staggering,” she said, noting that $18 billion worth of work is happening across B.C.

lkines@timescolonist.com

— With files from Andrew Duffy and Les Leyne

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Winners and losers in the B.C. budget

LOSERS

Top income earners: If you earn more than $220,000 a year, you will pay more in tax this year. A new personal income tax rate of 20.5 per cent on taxable income is being introduced for those described as the top one per cent of income earners in the province. James says nearly half of the $216 million the new tax rate will raise in 2020-21 will come from people making more than $1 million annually. The change increases the tax rate from the previous rate of 16.8 per cent.

Sugar lovers: The seven per cent provincial sales tax will be charged on sugary drinks starting in July. James says the tax is aimed at putting younger people on a healthier path as those between the ages of 14 and 18 are the top consumers of pop.

WINNERS

Post-secondary students: A new B.C. Access Grant means students will be eligible for a new grant of up to $4,000 to help cover their tuition costs, starting this fall. More than 40,000 students studying at public colleges and universities will be eligible for the grant.

Schools, hospitals, roads and subways: The government says it is spending a record $22.9 billion over the next three years on infrastructure, which includes funding for Vancouver’s new Broadway subway corridor. The budget says the money already being spent to improve hospitals, roads, transit and schools is helping stimulate more than 100,000 jobs during construction.

— The Canadian Press

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