Small-business owners in British Columbia will benefit from a cut to the small-business corporate income tax rate from 2.5 to 2 per cent, retroactive to April 1, 2017.
“What I have heard from our members is that many small businesses are welcoming the tax cut with open arms,” said Randi Amendt, manager of the Burns Lake and District Chamber of Commerce.
The B.C. Chamber of Commerce also welcomed the announcement.
“Encouraging economic growth, and supporting tax fairness for small businesses owners, is always welcome,” said Val Litwin, president and CEO of the B.C. Chamber of Commerce. “This tax break is positive, and will help reduce operational costs, as well as inspire growth and spur job creation in communities in every region of British Columbia.”
The reduction makes B.C.’s small-business corporate income tax rate the second lowest in Canada, tied with Alberta and Saskatchewan.
Both the NDP and the B.C. Liberals promised the tax would be reduced that amount, with the B.C. Liberals promising to make it retroactive. In last spring’s election campaign, the NDP promised only to cut the tax by half a point, and to raise the large corporate income tax from 11 to 12 per cent at the start of the new fiscal year, April 1, 2018.
The NDP government is also carrying out the B.C. Liberal promise to remove provincial sales tax from business electricity bills. Half of that tax came off this fall and finance minister Carole James said the rest is to be removed in April 2019. PST is not charged on residential B.C. Hydro bills.
In her budget update in September, James announced the return of a high-income personal income tax bracket. Effective April 1, 2018, personal income tax goes up two per cent on income over $150,000 a year, restoring an increase put in place by the B.C. Liberals before the 2013 election and removed two years later.
B.C.’s small businesses generated 34 per cent of provincial GDP in 2016, above the Canadian average of 31 per cent.
“Small business forms the backbone of our economy and we need to do all we can to support its continued growth,” said Bruce Ralston, Jobs, Trade and Technology Minister. “That’s why we are lowering the small-business corporate income tax rate by 20 per cent, so B.C.’s small-business owners can keep more of their hard-earned revenue and reinvest it back in their communities.”
– With files from Tom Fletcher