Last updated: Mar. 4, 2022
On February 22, 2022, British Columbia Finance Minister Selina Robinson presented the province’s fiscal 2022-23 budget.
B.C. Budget 2022 prioritizes making life better for British Columbians by investing in B.C.’s economic, environmental, and social strengths and taking actions to fight climate change and protect people and communities from climate-related disasters.
Provincial deficits of $483 million for 2021-22, $5.5 billion for 2022-23 and $4.2 billion for 2023-24 are projected. No changes were proposed to corporate or personal tax rates.
Personal Tax Measures
Personal income tax rates – No change
The budget does not include any changes to personal income tax rates. As a result, B.C.’s personal income tax rates for 2022 are as follows:
The 2021/2022 British Columbia personal tax rates are summarized as follows:
British Columbia Non-Refundable Tax Credits
The government confirmed today that personal tax credits for 2022 will be indexed by 1.021%. The maximum tax credit amounts and actual BC tax credits for 2021 and 2022 are set out below.
In general, credits are multiplied by 5.06% to arrive at the deduction from BC Tax. In the case of donations and gifts over $200, the credit is 20.50%
Corporate Tax Measures
Corporate tax rates – No change
No changes are proposed to the corporate tax rates or the $500,000 small-business limit.
British Columbia’s 2021 corporate tax rates are summarized as follows:
* on first $500,000 of active business income
** The federal small business rate was reduced from 10.00% to 9.00% effective 1 January 2019.
Training Tax Credit
BC Budget 2022 extends the training tax credit for two more years from 2022 to the end of 2024.
Small Business Venture Capital Tax Credit
The budget temporarily increases the Small Business Venture Capital Tax Credit (personal and corporate) to $41 million (from $38.5 million), effective for the 2022 to 2024 years, with this increase allocated to investments in clean technology businesses.
Provincial Sales Tax & Motor Fuel Tax Changes
Zero-emission vehicles
Effective February 23, 2022, used zero-emission vehicles are exempt from provincial sales tax. The exemption applies to sales of used zero-emission vehicles from motor dealers, as well as private sales of used zero-emission vehicles that have been driven for at least 6,000 kilometres.
Additionally, effective February 23, 2022, the passenger vehicle surtax threshold for zero-emission vehicles is increased to $75,000 from $55,000, scheduled to end on February 22, 2027.
Heat Pumps
The budget exempts heat pumps from PST, effective April 1, 2022. Where a heat pump is purchased before April 1, 2022, to fulfil a contract where the heat pump is affixed or installed into real property on or after April 1, 2022, the person who paid the PST on the heat pump can apply for a PST refund.
Fossil Fuel Heating Equipment
The budget increases the PST on fossil fuel combustion systems that heat or cool buildings or water from 7% to 12%, effective April 1, 2022. For contracts entered into on or after February 23, 2022, fossil fuel combustion systems will be subject to 12% PST if they are affixed or installed into real property on or after April 1, 2022.
Private Vehicle Sales
Effective October 1, 2022, the tax rate on private sales of motor vehicles will be based on the greater of the reported purchase price and the average wholesale value of the vehicle. This measure does not apply for motor vehicles involved in a trade-in.
Hydrogen fuel
Effective February 23, 2022, hydrogen fuel is classified as a Category 1 alternative motor fuel and is exempt from motor fuel tax provided that:
- The hydrogen is purchased for use in an internal combustion engine vehicle, and
- The hydrogen is not produced by electrolysis using coal-generated electricity unless the carbon dioxide emitted as a result of the process is captured and stored or captured and sequestered.
Other Noteworthy Items
Health Care
$3.2 billion is earmarked for health-care systems over the next three years, including $57 million to increase the number of Urgent and Primary Care Centres throughout the province.
$875 million is allocated in 2022-23 for Pandemic Recovery Contingencies for the Ministry of Health to continue to manage the COVID-19 pandemic.
Child Care
Average child care fees will drop to approximately $20 per day after the NDP promised $10-a-day childcare. Fees for full-day infant and toddler care will also be reduced by 50% to an average of approximately $20/day by the end of 2022.
Additionally, BC Budget 2022 promises the creation of 40,000 new licensed child care spaces for children under the age of six in the next seven years.
Climate-related Disasters
Budget 2022 builds on the $2.3 billion in funding allocated for CleanBC to date and invests over $1 billion in new funding for CleanBC and the Roadmap to 2030.
An additional $2.1 billion has been allocated to fund disaster recovery efforts and response to the threats from future climate-related disasters.
Infrastructure
A total of $27.4 billion is invested in major infrastructure projects like schools, hospitals, affordable housing, rapid transit, highways, and bridges, which will support 100,000 jobs in communities throughout the province.
BC Budget 2022 is also committed to connecting more than 280 remote, rural, and Indigenous communities to high-speed internet, improving access to digital health-care services, education, employment, and business opportunities.
Read the full budget here: BC Budget 2022
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