Economy

Finance Minister James announces new taxes to pay for child care, housing

Finance Minister James announces new taxes to pay for child care, housing

Parents with children in licensed day care programs in B.C. will see their costs drop under changes introduced in the provincial budget that the government describes as a first step towards providing a universal child care program.

It's being extended beyond Metro Vancouver to the Fraser Valley, the Capital Regional District, the Nanaimo Regional District, Kelowna and West Kelowna.

In 2018, the tax rate will be 0.5 per cent of assessed value.

The government conservatively estimates GDP growth of 2.3% in 2018, and 2% in 2019.

Effective Wednesday, the 15 per cent tax on foreign home buyers is being hiked to 20 per cent, and for the first time the steep levy will be applied outside of Metro Vancouver.

While it's now only in Metro Vancouver, it will be extended to the Fraser Valley, the capital regional districts in Victoria and Nanaimo and the Central Okanagan Regional Districts.

Brought in by the former B.C. Liberal government, the program was meant to bring more people into the housing market and spur development of entry-level homes.

The idea is to get more students housed on campuses to free up spaces elsewhere.

Perhaps the biggest announcement is the investment of $6.6 billion into homes and housing supports over the next decade, with funding promised to be shared with every corner of the province.

The government also promised up to $350 per month paid directly to licenced child care providers to reduce fees for an estimated 50,000 families a year by 2020/2021.

Renters who manage to find a home in B.C. will find it easier to keep it, James said.

The government expects to see revenue from income tax increase by $1 billion this year, compared with the 2017-18 fiscal year (from $8.8 billion to $9.8 billion), and reach $10.6 billion by 2020-21.

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The $54-billion balanced budget also promises historic investments in child care to create new spaces and train more caregivers, while giving some families access to two new programs to subsidize daycare costs.

The budget will eliminate Medical Service Plan premiums on January 1 2020.

To cover the loss of revenue, the government will introduce a new payroll tax on January 1, 2019.

Businesses with a payroll of more than $1.5 million will pay a tax of 1.95 per cent on their total payroll. Businesses with payrolls under $500,000 will pay no tax. A business with a payroll of less than $500,000 would pay no tax. "It meets or exceeds the commitment we were looking for", she said.

Manitoba, Ontario, Quebec and Newfoundland have similar taxes.

"The small business community is being hit with a 34 per cent hit to minimum wage in the next four years, a nine per cent increase in the corporate tax rate if they happen to make over the small business tax threshold, they are getting a 16 per cent increase in the carbon tax over the next few years".

If your drive a really expensive vehicle, you are going to pay more for it starting April 1.

James credited a strong and growing economy for being able to increase spending without resorting to deficits, although it does include a range of new taxes or tax increases.

Vehicles with a purchase price of $150,000 and above will be taxed at 20 per cent up from 10 per cent.

Irene Lanzinger, president of the B.C. Federation of Labour, said the child care plan will benefit working families.

Ferry fares will be frozen on all major BC Ferries routes and the seniors passenger fare discount will be fully restored.

"B.C.'s real estate market should not be used as a stock market, it should be used to provide safe and secure homes for families, for renters, for students [and] for seniors", James said.


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