VANCOUVER (NEWS 1130) – As we inch closer to the New Year, you’ll want to brace yourself for new tax cuts, hikes, and everything else in between.
According to Canadian Taxpayers Federation B.C. Director Kris Sims, we have a mixed bag for 2020 when it comes to taxes.
“The Basic Personal Amount — the BPA — for your federal income tax is going up, and what that is, is it’s an exemption,” she explains. “So, right now, if you’re making a little more than $12,000 or so per year, none of that is subject to federal income tax because, of course, it’s a right of Canadians to have a certain portion of their income not be taxed, and then you start getting taxed after that.”
The change see the BPA increased to $15,000, which amounts to close to $300 every year in savings by 2023, Sims says, calling it a “big tax cut.”
“Around 20-million Canadians are affected by this tax cut. So that’s the really good news,” she tells NEWS 1130.
However, this good news doesn’t come without some bad. Sims says the country’s deficit spending is “spiralling out of control,” and that will come back down to you.
“The deficit spending at the federal level is shocking. They basically aren’t even paying attention to it anymore,” she says. “So while it’s wonderful that we’ve got a tax cut… we really are imploring and begging the federal the government and the finance minister to reign in the spending side of things, along with giving us our tax cuts so that we aren’t facing that big deficit.”
But… the bad news:
Federally: "The deficit spending at the federal level is shocking," @kris_sims says. "They basically aren't even paying attention to it anymore."
B.C.: Province is bringing in EHT (see more in next tweet) https://t.co/lCRbdTr1GO
— Hana Mae Nassar (@HanaMaeNassar) December 26, 2019
Changes in B.C.
Provincially, Sims notes the big ticket item 2020 savings are headlined by is the scrapping of the Medical Services Premium.
As of Jan. 1, 2020, British Columbians will no longer be on the hook for the fee, after payments were brought down to 50 per cent this past year.
The change will see the average B.C. family save about $1,800 per year, Sims says. However, again, the good here doesn’t come without a catch.
“[The NDP] has brought in the Employer Health Tax — the EHT — and not just job creators are subject to it. So not your average small and medium size and sometimes big sized businesses in your local community, your local government — municipalities — have to pay the EHT, too,” she notes.
That means the cost will eventually be past down to you as cities and municipalities try to recoup the money they’re paying.
That can be done, for example, by increasing property taxes — which are set to rise by seven per cent in Vancouver next year, after council approved the hike earlier this month in its 2020 budget.
Sims says she’s heard from people around the province, including in Prince George where she says at least one business owner, who has been operating in that city for nearly four decades, who has already seen hikes total about the salary of a worker.
“If a business is losing out on that amount of money because of these health taxes coming from Victoria, that means that they’re holding back wage raises, that means that they’re not hiring that new person, that means that they could be reducing hours, and that of course means also that your local city hall is probably hiking your property tax because of it,” she says.
Bad news for Metro Vancouver
Food prices are expected to rise in 2020. That along with increases to property taxes, TransLink fares, already-high gas prices, and other taxes adds up, Sims explains, adding this will hit British Columbians hard, especially those in the Lower Mainland — particularly Metro Vancouver.
“It really is getting to the point where it’s unaffordable for average people. I can’t count how many people I have heard from who live way out in the [Fraser] Valley or they’ve abandoned the Lower Mainland altogether because it’s just not affordable,” she says. “I frankly don’t know how some folks do it. I don’t know how they manage to make rent in Vancouver and pay the high property taxes and the high gas prices, and keep in mind, also, our ICBC rates, our insurance rates, are the highest in all of Canada. They’re huge, and they’re going up, and up, and up.”
Meanwhile, food prices are expected to rise in 2020. That in addition to TransLink fare increases, already-high gas prices, taxes, will hit British Columbians, in particular Metro Vancouverites, hard, Sims says. #bcpoli
— Hana Mae Nassar (@HanaMaeNassar) December 26, 2019
When it comes to higher food prices, Sims says you can, in part, blame the federal government’s carbon tax.
“The carbon tax is going up, and also the carbon tax is now being imposed federally. Here in British Columbia, we have the highest carbon tax in all of Canada — and our emissions are going up, by the way — but now, federally, they have a carbon tax.”
Drying grains, feeding livestock, trucking products to stores to stock shelves — the whole cycle incurs costs, which are eventually passed down to you, the taxpayer.
Meanwhile, BC Hydro has proposed a minor cut — about one per cent — for 2020, but that could be followed by an increase in 2021, but that’s next year’s problem.
It’s welcome news for Sims, but she says the Crown corporation needs to ensure it’s run “well,” and that it’s not spending money saved.
“So that taxpayers aren’t on the hook for it. So, to be very clear, we don’t want them to start looking like ICBC, where taxpayers are really on the hook for that every single year. It’s listed every single year as a fiscal risk — we’re not hearing that from BC Hydro, so we’re glad to hear that, but we would also like to see rates as low as we can get.”
Helping British Columbians
On the provincial level, Sims says the government can do a number of things to help British Columbians. But when it comes down to it, she says budgeters need to realize “there’s only one taxpayer.”
“While they might be looking at line items in their budget, or different pools of money, and they start telling themselves, ‘This is for this program, that is for that program,’ picture, in their minds, the single taxpayer, and that single taxpayer is taxed to the max.”
Sims explains more than 40 per cent of our incomes go toward various levels of government through things like taxes, fees, and levies.
“There’s dwindling amounts left over. So by the time you’re finished paying your taxes and paying for all of your essentials, a lot of folks really don’t have much disposable income anymore.”
She points to this as being the reason why so many people are racking up record levels of debt, as well as credit card use and lines of credit.
Along with thinking of the individual, she says the province needs to watch its spending, and needs to stop “picking frivolous fights.”
That, for example, includes picking fights with the government of Alberta over the Trans Mountain pipeline, and spending taxpayer dollars in court.
-With files from Jon Szekeres