The 2018 B.C. budget included announcements that will affect everyone from parents of small children to luxury car owners and smokers. Here’s a summary of how the NDP’s first full budget will impact British Columbians.
A new child care program will make care effectively free for some low-income families, and offers modest subsidies for others based on income.
Families making up to $111,000 are eligible, but it will help low-earners the most: those making less than $45,000 with an infant in a licensed group facility, for example, will save up to $1,250 per month, while families with incomes between $60,000 and $80,000 with a child in preschool could save $240 per month. It will be phased in over three years and families can start applying in September 2018. By 2021, it is expected to help up to 86,000 families — more than three times the number receiving the old subsidy.
Effective in April, licensed child care facilities can opt into a program to reduce fees by $350 per month per space for licensed group infant/toddler, $200 per month per space for licensed family infant/toddler, $100 per month per space for licensed group care for ages three to five and $60 per month per space for licensed family care for ages three to five.
There’s no mention of when, or even if, government will meet its $10-a-day child care election promise.
The budget included $1.6 billion for affordable housing for students, Indigenous peoples, women and children fleeing abuse, and others. And while it increased financial assistance to seniors and low income working parents who rent their homes, it failed to deliver the promised $400 renters rebate. As a seeming trade-off, the government said it would review the grant it gives to homeowners “to improve fairness.”
Effective Feb. 21, there will be a hike on the property transfer tax from three per cent to five per cent on properties worth more than $3 million.
Property transfer tax is charged when changes are made to a property’s title. The current rate is one per cent on the first $200,000; two per cent on the portion of the fair market value between $200,000 and $2 million; and three per cent on the portion of the fair market value greater than $2 million.
Starting next year, an additional school tax will apply to residential properties worth more than $3 million, including detached homes, strata condos or townhouse units and vacant land. For mixed-use properties, only the residential portion of the value above $3 million will be taxable. The tax rate is 0.2 per cent on the residential portion assessed between $3 million and $4 million and a 0.4 per cent tax rate on the residential portion assessed at more than $4 million.
“Rising housing prices have benefited many people,” a Ministry of Finance statement on the tax increases says. “Those who have benefited the most from the rising real estate market should contribute their fair share.”
The government will impose an employer health tax to allow for the full elimination of Medical Services Plan (MSP) premiums, which is expected to save individuals up to $900 per year and families up to $1,800 per year. Currently, all households with adjusted net income of more than $42,000 per year pay the same amount. MSP premiums were cut by 50 per cent on Jan. 1, 2018 and the threshold for premium assistance was increased by $2,000.
The new payroll tax will come into effect Jan. 1, 2019, with the following rate structure:
• Businesses with a payroll of more than $1.5 million will pay a rate of 1.95 per cent on their total payroll.
• Businesses with a payroll between $500,000 and $1.5 million will pay a reduced tax rate.
• Businesses with a payroll under $500,000 will not pay the tax.
To make prescription drugs more affordable, B.C. is expanding its Fair Pharmacare program to eliminate deductibles for families with annual net incomes below $30,000, starting Jan. 1, 2019. Families with a net household income of less than $45,000 will have their deductibles reduced. Approximately 240,000 families will receive expanded coverage.
Ferry fares will be frozen on all three major routes (Tsawwassen-Swartz Bay, Tsawwassen-Duke Point and Horseshoe Bay-Departure Bay), and fares on small routes will be rolled back by 15 per cent. The Monday-Thursday free rate for seniors will also be restored.
Effective April 1, 2018, the tobacco tax rates will be increased by 2.8 cents, to 27.5 cents per cigarette, and by 12.8 cents, to 37.5 cents per gram, for all tobacco other than cigars and cigarettes.
High-end luxury cars will be taxed at a higher rate. Sales tax on vehicles over $125,000 will increase to 15 per cent. Sales tax for vehicles with a purchase price of over $150,000 will be increased to 20 per cent.
— With files from Rob Shaw, Matt Robinson, Sam Cooper, Pamela Fayerman and Lori Culbert
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