Summary Highlights of B.C.’s 2020-21 BudgetJake Steele, Wealth Advisor
Finance Minister Carole James announced the 2020-21 Budget this week as a balanced budget, projecting a surplus of $203 million for the 2019-21 fiscal year. The Budget aims to keep B.C. “moving forward” with increased funding for post-secondary students, climate action, and housing supply for B.C.’s most vulnerable residents.
I’ve summarized key points from the budget with an emphasis on changes that will affect our client’s day to day lives, as well as from a financial management perspective.
New Tax Bracket for B.C.’s Top Earners
If you’re earning more than $220,000 a year in income, you will be subject to a newly introduced provincial personal income tax rate bracket. Income in this bracket will be taxed at a rate of 20.5%, up from 16.8%.
Education and Parents
Low and middle-income post-secondary students are eligible for a new needs-based grant, the B.C. Access Grant. Grants up to $4000 will help cover tuition costs. We suggest talking to us about Registered Education Savings Plan (RESP) and post-secondary planning, relative to new grants being offered.
The budget allocates additional funding for parents including:
- $339 million over three years to improve schools with students in kindergarten through Grade 12
- $674 million allocated to childcare, to improve opportunities for early childhood educators and ensure enough spaces for B.C.’s children
- New B.C. Child Opportunity Benefit – some families with children under 18 could get up to $1,600 per year, those with two kids could get up to $2,600, and those with three could get up to $3,400.
New Tax on Soda and Heated Tobacco Products
PST will be charged on sweetened carbonated beverages. A tax of 29.5 cents on new “heated tobacco products”—devices that are not commonly used yet, and different than the widely available vaporizer—will take effect in April.
An additional $1 billion over three years for health services, including new and upgraded hospitals expected for 13 B.C. communities.
$56 million allocation to build 200 new units of supportive modular housing for people who are homeless or at risk of homelessness. An additional $50 million over 3 years is being set aside for supportive programs and services for those who are homeless, or who are at risk of homelessness. Plans include the creation of more than 500 new shelter spaces province-wide.
$419 million is being added to CleanBC investments to help schools, universities, colleges and hospitals become more energy efficient. An additional $20 million is being added to the provincial program to help residents purchase zero-emission vehicles, as well as $5 million in incentives to build home and workplace charging stations. If you are considering purchasing a new vehicle, there may be additional incentives for going electric.
As with any provincial or federal budget, there are impacts on your financial picture. As always, feel free to consult with your advisor. We can assist you in charting the most appropriate investment strategy for your situation that considers ever-evolving government policy.