British Columbia Archives

BC Income Taxation Branch Update

The British Columbia Income Taxation Branch has issued the following new item on its web site

For the 2010 tax year:
The BC Consumer Price Index (CPI) for the period ending September 30, 2009 as published has been used to calculate the 2010 Personal Income Tax Brackets and the 2010 Non-refundable Tax Credit Blocks.

In addition, the Training Tax Credit brochure has been updated with Budget 2009 increased tax credits.

URL: http://www.sbr.gov.bc.ca/msbr/whats_new/income_taxes/whatsnew.htm

BC Income Taxation Branch What's New

The British Columbia Income Taxation Branch What's New document has provided updated information on several bulletins.

Bulletin CIT 009, British Columbia Film and Television Tax Credit, has been updated to include changes to expand eligibility requirements to Canadian-controlled corporations, and the elimination of the program expiry date.

Bulletin CIT 010, British Columbia Production Services Tax Credit, has been updated to reflect the elimination of the program expiry date.

For the text of the document and more information, please see: http://www.sbr.gov.bc.ca/msbr/whats_new/income_taxes/whatsnew.htm

Canada Day Brickbats & Laurels

While Canadians celebrated Canada Day on July 1, it was business as usual for government. Taxes were paid, regulations enforced and lawmakers handed out awards. Indeed, the holiday was an unusually active one on public policy issues of concern to the Canadian Taxpayers Federation, which is dedicated to lower taxes, less wasteful spending and government that is accountable to voters.

On Taxes – Brickbat to Higher Energy Taxes

British Columbia taxpayers are paying more for gasoline and most other energy sources as a result of Liberal Premier Gordon Campbell’s introduction of a carbon tax. The levy went into effect on July 1 and gasoline taxes increased by 2.34 cents a litre (the additional tax paid by consumers is actually 2.46 cents/L when the GST tax-on-tax is factored in). Vancouver, which today has the highest taxes on gasoline, saw pump prices jump to over $1.50. The province’s carbon tax will also hit natural gas, propane, diesel and jet fuel. It will rise again on Canada Day over the next four years unless high energy prices and voter furry prompts Premier Campbell to rethink his policy.

Canada’s Official Opposition also wants to saddle consumers with a federal carbon tax if they win the next federal election. Liberal Leader Stéphane Dion’s plan will not add a new tax to pump prices because, the opposition rightly says, gasoline is already heavily taxed by Ottawa. Instead, the Liberal proposal will see taxes on other energy sources – like home heating fuel – rise to the level of taxes applied to gasoline.

On Spending – Laurel to the Department of Indian Affairs

July 1 also saw the introduction of a reform to bring badly-needed accountability to Canada’s native reserves. Indian Affairs Minister Chuck Strahl’s hard-fought proposal to amend departmental funding agreements to include an audit clause went into effect. This change gives Ottawa powers to review how native bands spend tax dollars and is something taxpayers – native and non-native alike – have repeatedly demanded. Ottawa believes adding any audit mechanism will ensure tax dollars are actually spent “for the provision of intended programs and services and that [native reserves] have appropriate management, financial, and administrative controls in place.” Translation: that federal money is spent responsibly and bands account for it. This small, but necessary, spending reform brings the Indian affairs department in line with virtually every other federal department, including health, heritage and the RCMP. It is a long-overdue reform given that every year $10-billion is transferred to native bands across Canada.

On Accountable Government – Brickbats to the Government of Canada & Rideau Hall

Prime Minister Stephen Harper quickly distanced his government from Rideau Hall’s award of the Order of Canada to Dr. Henry Morgentaler this week. Whereas the Governor-General routinely takes advice from elected officials on other matters, Order of Canada appointments are made by an advisory committee without ministerial input. If Canadians are hoping their Prime Minister might have a say on appointments they must look across the pond, to Britain.

Former Prime Minister Jean Chrétien advised the Queen not to grant a life peerage to Conrad Black after the British government recommended him for this honour. Similarly, Canadian Roy Thomson’s peerage was blocked by Lester Pearson. (Both men forfeited their Canadian citizenship to bypass Ottawa’s ruling.) The British honour system includes an advisory committee, but unlike Canada also permits input from the Prime Minister’s office. Canada’s Prime Minister can therefore advise (approve or block) our Queen on the granting of honours to Canadians from London, but he has no influence on honours originating in Ottawa. Only in Canada, you say? Pity, but not surprising.

END

Please note that after six good years with the Canadian Taxpayers Federation, I will be resigning as federal director on Sept. 12, 2008, to undertake graduate studies in economics.

John Williamson
Federal Director
Canadian Taxpayers Federation

Government of Canada delivers on the promise of the Softwood Lumber Agreement

$467 million in export charges paid to 6 provinces

In a Canada Revenue Agency News Release, Minister of National Revenue Gordon O'Connor has announced that the CRA has distributed close to $470 million in revenue to six provinces from charges on exports of softwood lumber products destined for the U.S.

According to the release:

"The six provinces whose products may be subject to the export charge under the September 2006 Canada-U.S. Softwood Lumber Agreement (SLA) are: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. Exports of softwood lumber products from the Atlantic provinces are not subject to the export charge."

For more information, see:
http://www.cra-arc.gc.ca/newsroom/releases/2008/jan/nr080111-e.html

Medicare's Socialist Weeds vs. Capitalist Wheat

A Vancouver private health clinic that was prohibited in December from treating British Columbia residents by the provincial government has re-opened its doors to the public. The False Creek Urgent Care Centre will charge $199 for a basic medical evaluation and offer patients a menu of other services. It will operate outside the government-run medicare system and provide emergency care for people willing to pay for immediate service. Predictably, fee-for-service medicine prompted the usual howls of protest.

The False Creek owner, Dr. Mark Godley, skirted provincial law banning doctors or clinics from billing patients for services covered by medicare by adopting a business model from the unlikeliest of places – Quebec. Elsewhere is Canada, “save medicare” activists insist patients sit in queues waiting – and at times dying – for hospital treatment. Yet Quebec offers its residents more private health care than any other province and for-profit facilities operate unmolested by health bureaucrats. Dr. Godley decided to import Quebec’s common sense to Lotus land.

Copying the Quebec model and recruiting physicians from outside the province not enrolled in B.C.’s Medical Services Plan appears to have worked. (The clinic hired two doctors from Alberta and one from Manitoba.) Provincial Health Minister George Abbott believes the private clinic is operating within the law. Moreover, he says Ottawa is unlikely to act because similar clinics exist in Quebec. Federal Health Minister Tony Clement stated the obvious, “This model already is in existence in Canada” and does not violate the Canada Health Act.

Some opponents of timely medical access are worried doctors will opt out of the public system. Indeed, the loss of three doctors from Alberta and Manitoba is a gain for B.C. patients. Yet Canada’s problem is not training doctors but retaining them after graduation.

A study published this week in the Canadian Medical Association Journal reports one in nine trained-in-Canada doctors is opting to practice medicine in the United States. (It is “only” one in 12 if U.S. students are excluded.) With 17 medical schools in Canada, the impact of this brain drain is like setting aside the graduates from two average-sized schools for employment in the U.S. The economics of Canada’s strict command-and-control medical system is responsible for the exodus of talent and doctor shortage.

Permitting more private care, choice and competition in Canada will result in more doctors working in Canada, not fewer. As in all other areas of the Canadian economy, some will opt to work in the public system and others in the private sector. Yet for defenders of the status quo, socialist weeds still taste better than capitalist wheat (to paraphrase China’s deceased Communist leader Mao Zedong).

Liberal MP Hedy Fry, cannot grasp why any Canadian would spend their income to buy a health service. Responding to the re-opening of the Vancouver clinic, she wondered how it will survive when Canadians are “100% entitled to have medically required services paid for” and why “someone [would] pay for something that is covered by public insurance?” Dr. Fry has spent too much time in Ottawa and not enough with patients.

The answer is obvious to anyone willing to look. Government managed health care has resulted in long wait lines for basic medical services. Furthermore, many Canadians are simply unable to find a doctor. According to a 2004 report from Statistics Canada some 1.2 million Canadians cannot find a family doctor. So much for a 100% entitlement.

Fewer and fewer Canadians believe mandatory wait lines are superior to private alternatives. As such, they are increasingly open to private delivery within a publicly funded medicare system, and even a parallel system operating alongside medicare.

Increasingly, Canadians want competition within medicare to ensure their tax dollars are delivering health care results, ensuring good customer service and improved outcomes. Many also believe government has no business telling people they cannot spend their after-tax dollars on additional medical procedures. As a result, they are looking to Europe – not America – for solutions.

Compared to other developed nations, Canada tops the list in spending, has the most restrictions on private medicine, and ranks in the middle in terms of outcomes. Sweden, for example, spends less money, has more private involvement, and offers more services to its citizens. Name your developed country – Germany, France, New Zealand, Japan, etc. – and chances are very strong they provide better care to their citizens at a lower cost. What these nations have in common is mixing a public system and a private system to deliver superior results. This is what Canadian governments ought to be striving for. Happily for patients it is what Dr. Godley is working to achieve.

John Williamson
Federal Director
Canadian Taxpayers Federation

BC Income Tax Branch: What's New

To find out What's New in provincial taxes in British Columbia, the Government of British Columbia Income Tax Branch provides a subscription service to for email notification of new information on its web site. For more information, see:
http://www.rev.gov.bc.ca/itb/whatsnew.htm

CHANGES TO BC FORMS

The Income Taxation Branch of the Government of British Columbia has provided an information update indicating that two fillable forms are now available on their web site:
- FIN 27, Waiver of the Assessment Period and
- FIN 525, Notice of Revocation of Waiver

For more information see the BC Income Taxation Branch web site at:
http://www.rev.gov.bc.ca/itb/whatsnew.htm

BC Personal Income Tax - 2006 Indexed Amounts

The Income Taxation Branch of the Ministry of Small Business and Revenue, Government of British Columbia, has updated information on its web site concerning Personal Income Tax TONI in 2006.

In the 2006 taxation year:

- 2006 tax brackets are indexed;

- indexing of credits and tax brackets is based on the Consumer Price Index for British Columbia (BC CPI) for the 12 month period ended on September 30, 2005 (see below);

- various non-refundable tax credits are indexed (see 2006 Non-Refundable Tax Credit Block);

- the BC CPI used to calculate 2006 amounts was 2.1%; and

- the tax credit for charitable donations in excess of $200 is calculated at the highest rate of tax - 14.7%.

For more information see the Income Taxation Branch What's New page at:
http://www.rev.gov.bc.ca/itb/whatsnew.htm

Scientific Research and Experimental Development Tax Credit

The BC Ministry of Small Business and Revenue, Income Taxation Branch, has posted the Revision to Bulletin CIT 007 on its web site. This bulletin addresses the British Columbia Scientific Research and Experimental Development Tax Credit which has been revised to reflect the extended expiration date of the tax credit program.

For more details, see the web site at:
http://www.rev.gov.bc.ca/itb/WhatNew/CIT007_revision.htm

BC Interest Rates on Outstanding Balances

The British Columbia Ministry of Small Business and Revenue has posted to its web site interest rates in effect from October 1, 2005 to December 31, 2005.

The interest rate charged on outstanding balances and late payments will be 7.50%. The interest rate the BC government pays on overpayments will be 2.50%.

For more information view the web site at:
http://www.rev.gov.bc.ca/itb/WhatNew/interest_rates_oct-dec_2005.htm

BC Budget Update

The British Columbia Ministry of Revenue has issued a recent Budget Update on its web site. The announcement includes:

- A reduction to the General Corporate Income Tax Rate

"Effective July 1, 2005, the general corporate income tax rate will be reduced from 13.5% to 12.0%."

- Addition of Life Science Patents under the International Financial Activity Act

"Effective January 1, 2006, the International Financial Activity (IFA) program is expanded to include refunds of provincial corporate income taxes on income derived from certain patents."

For more information and links to supporting information view the BC Income Taxation Branch web site at:
http://www.rev.gov.bc.ca/itb/2005_budget_update.htm

BC Logging Tax Act forms update

The Government of British Columbia has posted a What's New notification identifying the updates of several Logging Tax Act related forms now available on its web site.

FIN 571: Authorizing the Ministry of Small Business and Revenue to release confidential tax payer information in matters pertaining to the Logging Tax Act

FIN 192: Waiver of the Time Period for Assessment pursuant to the Logging Tax Act

FIN 194: Notice of Revocation of Waiver pursuant to the Logging Tax Act

For more information see:
http://www.rev.gov.bc.ca/itb/WhatNew/log-Jul2005.htm

Digital Animation or Visual Effects Tax Credit - Update

The Government of British Columbia has updated its bulletin on the Digital Animation or Visual Effects Tax Credit (April 2005), providing more detailed guidance with respect to the legislation.

Bill 7, Income Tax Amendment Act, 2003 amended the Income Tax Act to provide the legislative framework for the Digital Animation or Visual Effects (DAVE) tax credit.

"The DAVE tax credit program provides refundable tax credits on a corporation’s digital animation or visual effects activities that qualify for either the basic Film and Television tax credit or the Production Services tax credit. These credits are claimed when filing the T2 Corporation Income Tax Return, and are refundable to the extent they exceed the corporation’s income tax payable."

For more information, see:
http://www.rev.gov.bc.ca/itb/Bulletins/cit_011.pdf

Update BC tax bulletins

The Ministry of Provincial Revenue has amended information bulletins on several tax topics:

Bulletin IPT 003 Insurance Premium Tax Act Amendments (February 2005) has been amended to include information introduced in Budget 2005.

Bulletin CCT 013 Corporation Capital Tax Act Amendments 1994 - 2005 has been amended to include information introduced in Budget 2005.

For more information, please see:
http://www.rev.gov.bc.ca/itb/WhatNew/bulletins_updated_Budget2005.htm

Changes to income tax in B.C.

On March 3, 2005 in British Columbia, Bill 7, Income Tax Amendment Act, 2005 received royal assent. Specific changes relate to the BC tax reduction credit, BC Business Limit, the Film and Television Tax Credit and the Production Services Tax Credit.

Changes include an increased to the BC business limit:

Effective January 1, 2005, the British Columbia business limit to which the British Columbia small business rate of corporate income tax may be applied is increased from $300,000 to $400,000.

Corporations should also review the corporate straddle provisions:

A corporation with a taxation year that starts before January 1, 2005 and ends after December 31, 2004 will be required to prorate its British Columbia business limit of $400,000, based on the number of days in the taxation year after December 31, 2004. The business limit of $300,000 must be prorated based on the number of days in the taxation year prior to January 1, 2005.

For more information on the BC Business Limit, please see the Bulletin at:
http://www.rev.gov.bc.ca/itb/Bulletins/cit_002-SR.pdf

For changes to the British Columbia Film and Television Tax Credit, please refer to the Bulletin at:
http://www.rev.gov.bc.ca/itb/Bulletins/cit_009-SR1.pdf

For more information on the British Columbia Production Services
Tax Credit, please refer to the Bulletin at:
http://www.rev.gov.bc.ca/itb/Bulletins/cit_010-SR1.pdf

BC Budget 2005

On February 15, 2005, the Government of British Columbia announced a number of changes to the taxation statutes administered by the BC Ministry of Provincial Revenue.

Summaries of the changes to legislation are outlined in the Budget Bulletin 2005, Changes to Legislation Administered by the Ministry of Provincial Revenue.

Among the changes in Consumer Taxes include:

- the tax refund program for alternative fuel vehicles is replaced with a point of sale tax reduction,
- the amount of sales tax relief is enhanced, and
- changes are made to the definition of a hybrid electric vehicle.

Important changes to Income Tax for individuals and companies include:

- The BC Tax Reduction reduces taxes payable by up to $360 for individuals with a net income of $16,000 or less. Individuals with a net income between $16,000 and $26,000 are eligible for a reduced credit. The credit is decreased by 3.6% of net income above $16,000

- The British Columbia “business limit” to which the low rate of corporate income tax may be applied is increased to $400,000 from $300,000, effective January 1, 2005.

For other changes to the Social Service Tax (PST), Hotel Room Tax, Motor Fuel Tax, Tobacco Tax, Income and Corporate Taxes, Corporation Capital Tax, International Financial Activity Act, Insurance Premium Tax, Property and Property Transfer Taxes, Home Owner Grant, School Tax, Rural Area Property Tax, and Miscellaneous information, view the bulletin at:
http://www.rev.gov.bc.ca/budget/budgetbulletin.pdf

For further information see also:
http://www.rev.gov.bc.ca/budget/budget.htm