The B.C. NDP government is adding another high-income tax measure this year, a new top marginal rate of 20.5 per cent.
Finance Minister Carole James announced the new bracket in her third B.C. budget Tuesday, noting that it will only apply to B.C. tax filers with incomes above $220,000. More than half of the revenue from the new top bracket is expected to come from individuals with incomes above $1 million, and B.C.’s income tax rate will still be third lowest among Canadian provinces for individuals earning up to $475,000, James said.
in her first full budget in 2018, James restored a top tax bracket that had been put in place by the previous B.C. Liberal government for two years. She reimposed a two-per-cent increase that applies to income of more than $150,000 a year.
The latest increases push total income tax for high-income earners close to 50 per cent, combining federal and provincial income tax rates. As of 2019, 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.
“B.C.’s tax regime is simply uncompetitive with not only neighbouring U.S. states, but several Canadian provinces,” said Ben Eisen, a senior fellow at the Fraser Institute who produced a study called Assessing British Columbia’s Tax Competitiveness in 2019.
At the other end of the income scale, the B.C. NDP’s program goal of a $15-an-hour minimum wage will be reached this year, as first promised by Premier John Horgan when he was opposition leader in 2016. The NDP government committed to a series of increases that will bring the basic wage to above $15 by 2021, affecting 140,000 people in B.C., James told the legislature in her budget speech.
Former B.C. Green Party leader Andrew Weaver objected to the 2021 deadline for reaching $15 when it was announced, calling for a “Fair Wage Commission” to determine the rate rather than arbitrarily meeting a deadline that the B.C. Federation of Labour considered too slow. The commission was agreed to as part of the minority government support deal with the Greens, but result has ended up the same.