2020 Budget tax changes
Publication date: September 2, 2020On February 18, 2020, the government announced changes to the provincial tax laws.
Read a summary explanation of all the tax changes for Budget 2020 in the Budget and Fiscal Plan.
Changes were introduced for:
Learn more about the following tax changes using the sources below.
On June 22, 2020, the government announced amendments to Bill 4, Budget Measures Implementation Act, 2020.
On September 2, 2020, the government announced proposed effective dates for the following Budget 2020 items:
Sales taxes
Provincial sales tax
Carbonated beverages – Effective April 1, 2021, carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners will no longer qualify for the exemption for food products for human consumption. Effective April 1, 2021, PST will also apply to all beverages that are dispensed through soda fountains, soda guns or similar equipment, along with all beverages dispensed through vending machines (except vending machines wholly dedicated to dispensing beverages other than sweetened carbonated beverages, e.g., coffee or water machines).
PST registration – Effective April 1, 2021, Canadian sellers of goods and Canadian and foreign sellers of software and telecommunication services will be required to register to collect PST if specified B.C. revenues exceed $10,000. Also, effective April 1, 2021, all Canadian sellers of vapour products will be required to register to collect PST if they cause vapour products to be delivered to B.C. purchasers.
Machinery and equipment – Effective February 19, 2020, exemptions for pollution control and waste management machinery and equipment are amended to remove the restrictions regarding the location where the machinery and equipment is used. The following bulletins have been updated to include this information: Bulletin PST 110 Production Machinery and Equipment Exemption (PDF), Bulletin PST 111 Mining Industry (PDF) and Bulletin PST 113 Oil and Gas Industry - Producers and Processors (PDF).
Electric aircraft – Effective February 19, 2020, electric aircraft are exempt from PST. Also, a refund is added for PST paid on or after February 19, 2020 in relation to non-electric aircraft obtained for the purpose of converting the aircraft to operate solely on electricity, as well as for PST paid on parts and related services obtained for this purpose.
Real property contractors – Effective February 19, 2020, real property contractors who perform value-added work to goods and then install those goods into real property outside B.C. can apply for refunds of PST paid on those goods.
Motor vehicle dealers and manufacturers – Effective March 1, 2020, when a motor vehicle dealer or manufacturer changes the use of a vehicle in their sale or lease inventory, higher PST rates apply as follows:
- Average value of $125,000 to $149,999.99 – rate increased from 10% to 15%
- Average value of $150,000 and above – rate increased from 10% to 20%
Multijurisdictional vehicles – Effective on Royal Assent, the amendments to the Provincial Sales Tax Act clarify:
- Refunds for vehicles brought into B.C. to be immediately licensed as multijurisdictional vehicles; and
- Authority for the director to impose a penalty when PST collectors improperly provide an exemption for these vehicles.
Effective on a date to be specified by regulation, amendments to the Provincial Sales Tax Regulation clarify requirements for PST collectors to document exemptions and keep records of information related to these vehicles.
Bundled leases – Effective February 19, 2020, if a single price is charged for the lease of a taxable good along with an exempt good or real property, PST applies to the fair market value of the lease of the taxable good.
Leases – Effective February 19, 2020, the definition of "lease" has been changed to exclude a right to use coin-operated machines and garbage and similar bins.
Related services – Effective February 19, 2020, various exemptions for related services do not apply to a related service provided by a lessor or provided by a third party through a contract with a lessor, during the lease of goods.
Carbon tax
Effective April 1, 2021, the B.C. carbon tax rates will be aligned with the federal carbon pricing backstop methodology, where applicable. This means the carbon tax rates will be revised from the rates that were previously set in 2017.
Also, effective April 1, 2021, the rates for shredded and whole tires will be replaced with a new category for combustible waste. Combustible waste will include tires in any form and asphalt shingles as a new taxable combustible.
Motor fuel tax
The refund rates for International Fuel Tax Agreement licensees will be adjusted to reflect the revised carbon tax rates when the B.C. carbon tax rates increase.
Tobacco tax
Effective August 1, 2020, a new tax rate of 29.5 cents per heated tobacco product unit is introduced.
Income taxes
Personal Tax
Effective January 1, 2020, a new top personal income tax bracket will be introduced effective for the 2020 and subsequent tax years.
With this tax rate increase, the charitable donation tax credit for individuals is increased.
Corporate tax credits
The BC training tax credits are extended for three years to the end of 2022.
The BC farmers’ food donation tax credit is extended for three years to the end of 2023.
Effective July 1, 2020, pre-certification notification has been introduced for corporations intending to claim the production services tax credit.
Effective February 19, 2020, the accreditation certificate fee for the production services tax credit is increased.
Effective for taxation years beginning after February 18, 2020, the deadline to claim the Film Incentive BC and the production services tax credit is reduced to 18 months.
Property taxes
Rural property tax
Residential and non-residential rural area property tax rates for 2020 will be set in the spring consistent with long-standing rate-setting policy.
Home owner grant
As announced on January 3, 2020, the threshold for the phase-out of the home owner grant has decreased from $1,650,000 to $1,525,000 for the 2020 tax year.
Home owner grant administrators will work with local governments on the centralization of the administration of the home owner grant.
Property transfer tax
Effective on a date to be specified by regulation, a new exemption from additional property transfer tax will be introduced for qualifying Canadian-controlled limited partnerships.
Effective on Royal Assent, the Property Transfer Tax Act is amended to clarify the calculation of partial principal residence exemptions where the land is greater than 0.5 hectares or the property includes non-residential improvements. There is no change to the calculation as the clarification is consistent with administrative practice.
Property tax deferment
Effective May 1, 2020, the Land Tax Deferment Act is amended to centralize program administration within the Ministry of Finance. These changes will improve the filing and processing of property tax deferment applications. The eligibility requirements for property tax deferment remain the same.
School tax
Provincial residential and non-residential school property tax rates for 2020 will be set in the spring.
Natural resource taxes
Mineral tax
Effective on a date to be specified by regulation, the new mine allowance is extended for five years to the end of 2025.
Various acts
Effective on Royal Assent, various taxation and revenue statutes are amended to provide the Minister the authority to further delegate appeal decisions.