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The harmonized sales tax, implemented in B.C. in 2010 and then repealed in 2011 after a province-wide petition demanded it, was designed to make business more competitive by spreading sales tax across more services and lifting it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

Just Posted

Cariboo Regional District appoints four new fire chiefs

New chiefs take their positions in Ten Mile, West Fraser, Wildwood and 108 Mile

Hundreds turn out for caribou recovery engagement session in Quesnel

Since last week’s meeting, the public engagement period has been extended to May 31

Technical analysis of changing land base in Quesnel Timber Supply area begins

Quesnel hosted a technical landscape meeting last week as part of Forestry Initatives Program

Quesnel’s Paisley Players return with new, two-play show

The show is written and directed by local Gino de Rose

Quesnel SPCA asks public for donations after puppy caught in trap

The puppy’s medical bills are expected to amount to more than $4,600

VIDEO: Alberta man creates world’s biggest caricature

Dean Foster is trying to break the world record for a radio show contest

Should B.C. lower speed limits on side roads to 30 km/h?

Vancouver city councillor wants to decrease speed limits along neighbourhood side roads

Lawsuit eyed over union-only raise for B.C. community care workers

‘Low-wage redress’ leaves 17,000 employees out, employers say

Landlord of alleged Okanagan shooter recounts deadly day

Tony Friesen was working in one of the units of his Penticton building when he heard shots

Foreign national arrested in connection to thefts at YVR

A woman, 60, is being held in police custody as Richmond RCMP investigate

Police pursue pesky porker on Vancouver Island

‘This was allegedly not the pig’s first escape’

Westjet tries again to dismiss proposed class-action lawsuit alleging discrimination

Former flight attendant claims airline broke contractual promise to create harassment-free workplace

Man airlifted to hospital after apparent hunting incident in East Kootenay

The man was in stable condition when he was flown out of Fairmont Hot Springs to a Calgary hospital

Police probe eight fires set at B.C. elementary school

Nanaimo RCMP say fires appear to have been set intentionally

Most Read