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

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The harmonized sales tax, implemented in B.C. in 2010 and then repealed in 2011 after a province-wide petition demanded it, was designed to make business more competitive by spreading sales tax across more services and lifting it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

Just Posted

Marine biologist Rick Harbo pulls a lid from the Ladysmith harbour, which he uses to monitor the presence of native and non-native species in the Ladysmith harbour. (Cole Schisler photo)
Unidentified sponge may be the latest marine species invading Ladysmith Harbour

Marine biologist finding dozens of alien species in warm-water harbour, none of them threatening

More and more graffiti has appeared in Ladysmith’s downtown core during the pandemic. (Cole Schisler photo)
Council creates rebate program to encourage graffiti clean up

Property owners can receive up to $50 to help fund graffiti removal

Rick Ruppenthal of Saltair will host a 12-hour talk-a-thon Friday, June 18 over Facebook live. (Photo submitted)
Talk-a-thon to focus on men’s mental health issues

Saltair man spearheading a campaign to generate more conversation during fundraiser

(File photo)
Poverty reduction survey identifies 10 poverty themes

Poverty reduction plan will be finalized in July 2021

Maxwell Johnson is seen in Bella Bella, B.C., in an undated photo. The Indigenous man from British Columbia has filed complaints with the B.C. Human Rights Tribunal and the Canadian Human Rights Commission after he and his granddaughter were handcuffed when they tried to open a bank account. THE CANADIAN PRESS/HO-Heiltsuk Nation, Damien Gillis, *MANDATORY CREDIT*
VIDEO: Chiefs join human rights case of Indigenous man handcuffed by police in B.C. bank

Maxwell Johnson said he wants change, not just words, from Vancouver police

Two ambulances and a medevac helicopter are on scene at Taylor River Flats rest area on Highway 4 due to a serious motor vehicle incident. (PHOTO COURTESY MAGGIE BROWN)
Highway 4 reopens between Port Alberni and Tofino

Multi-vehicle accident temporarily closed highway in both directions

Tk’emlups te Secwepemc Chief Rosanne Casimir stands outside the former Kamloops Indian Residential School after speaking to reporters, in Kamloops, B.C., on Friday, June 4, 2021.THE CANADIAN PRESS/Darryl Dyck
Kamloops chief says more unmarked graves will be found across Canada

Chief Rosanne Casimir told a virtual news conference the nation expects to release a report at the end of June

A woman wears a vaccinated sticker after receiving a COVID-19 vaccine at a vaccination clinic run by Vancouver Coastal Health, in Richmond, B.C., Saturday, April 10, 2021. THE CANADIAN PRESS/Jonathan Hayward
B.C. ranks among highest in world in COVID-19 first-dose shots: health officials

More than 76% of eligible people have received their 1st shot

A screenshot of the First Peoples Cultural Councils First Peoples’ Map. (First Peoples Cultural Council)
Online resource blends B.C.-Alberta’s Indigenous languages, art and culture

Advisor says initiative supports the urgent need to preserve Indigenous languages

An artists conception of the new terminal building at the Pitt Meadows Regional Airport.
Air travel taking off in B.C., but lack of traffic controllers a sky-high concern

There will be demand for more air traffic controllers: Miller

Canadian Armed Forces experts are on their way to North Vancouver after a local homeowner expressed worry about a military artifact he recently purchased. (Twitter DNV Fire and Rescue)
Military called in to deal with antique ‘shell’ at North Vancouver home

‘The person somehow purchased a bombshell innocently believing it was an out-of-commission military artifact’

Amy Kobelt and Tony Cruz have set their wedding date for February, hoping that more COVID-19 restrictions will have lifted. (The Macleans)
B.C. couples ‘gambling’ on whether COVID rules will let them dance at their wedding

Amy Kobelt and Tony Cruz pushed back their wedding in hopes of being able to celebrate it without the constraints of COVID-19

A plane is silhouetted as it takes off from Vancouver International Airport in Richmond, B.C., May 13, 2019. THE CANADIAN PRESS/Jonathan Hayward
Report calls for airlines to refund passengers for flights halted due to COVID-19

Conclusion: federal help should be on the condition airlines immediately refund Canadian travellers

Most Read