B.C. top income tax rate nears 50%, investment taxes highest in Canada

Competing for skilled workers with U.S. states getting more difficult, study says

Increases in top personal income and corporate taxes are making it more difficult for B.C. to compete for highly skilled workers compared to neighbouring U.S. states, according to a new study from the Fraser Institute.

B.C.’s top combined federal and provincial personal income tax rate is 49.8 per cent, applying to income of $150,000 and up. That’s about 13 per cent higher than the rate in Washington and Alaska, neither of which has a state income tax.

“The B.C. government has recently made worse the province’s long-standing tax competitiveness problem with recent hikes to personal and corporate income taxes, payroll taxes, carbon taxes, vehicle taxes and property taxes – all of which make it harder to attract potential skilled workers, investors and businesses,” said Ben Eisen, a senior fellow at the Fraser Institute and co-author of Assessing British Columbia’s Tax Competitiveness.

“B.C.’s tax regime is simply uncompetitive with not only neighbouring U.S. states, but several Canadian provinces.”

The study ranks B.C. ninth highest among provinces and states in North America in the top personal income tax rate. For tax rates on business investment, the survey finds B.C. to be highest among provinces.

RELATED: B.C. health care payroll tax approved, takes effect Jan. 1

RELATED: B.C. Greens MLA questions impact of payroll tax on jobs

The gap is made more significant by major tax changes implemented last year by U.S. President Donald Trump. B.C.’s corporate income tax rate is “in the middle of the pack” for provinces, the study says. But using a measure called “marginal effective tax rate” that calculates the broader application of sales tax to businesses, B.C. goes to the top.

The harmonized sales tax, implemented in B.C. in 2010 and then repealed in 2011 after a province-wide petition demanded it, was designed to make business more competitive by spreading sales tax across more services and lifting it from manufacturing and other business inputs on the way to delivering a final product.

B.C. businesses are now coming to grips with the new employer health tax, a new tax on payrolls of more than $500,000 a year that takes effect as of Jan. 1 to replace provincial revenue from the Medical Services Plan tax. Some businesses are paying both for 2019, with the MSP rate reduced by 50 per cent and eliminated in 2020.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

VIDEO: Robert Bateman celebrates 90th birthday

Trudeau, Margaret Atwood and more appear in ‘happy birthday’ video

Greater Victoria’s first BC Cannabis Store could open at Saanich shopping centre

Store application for Uptown Shopping Centre headed for public hearing

Royal B.C. Museum reopens in phases, some galleries remain closed to start summer

Victoria museum and archives open first galleries June 19

Study looks at feasibility of Vancouver Island abattoir

South Island Prosperity Partnership funds study looking at local meat processing

Homeless shelter at Save-On-Foods Memorial Centre creates 40 jobs

The arena can house 45 people in pop-up pods

B.C. records no new COVID-19 deaths for the first time in weeks

Good news comes despite 11 new test-positive cases in B.C. in the past 24 hours

Tahsis opens its gates to visitors to save local economy

Seasonal local businesses that rely on tourism hope to survive despite drop in tourist numbers

BC Corrections to expand list of eligible offenders for early release during pandemic

Non-violent offenders are being considered for early release through risk assessment process

Facing changes together: Your community, your journalists

The COVID-19 pandemic has changed the world in ways that would have… Continue reading

Fraser Valley driver featured on ‘Highway Thru Hell’ TV show dies

Monkhouse died Sunday night of a heartattack, Jamie Davis towing confirmed

Island city cancels plan for homeless camp; exploring alternative option

The plan heard strong objection from neighbouring residents and businesses

B.C. visitor centres get help with COVID-19 prevention measures

Destination B.C. gearing up for local, in-province tourism

36 soldiers test positive for COVID-19 after working in Ontario, Quebec care homes

Nearly 1,700 military members are working in long-term care homes overwhelmed by COVID-19

Most Read