VICTORIA (NEWS 1130) – There’s a lot to chat about around the water cooler after Tuesday’s announcement of the B.C. budget for 2020, and it’s not necessarily about spending on big ticket items.
It’s the little things that are taking a hit: your soda, your Netflix, and the top one per cent of earners in the province.
The province announced it would be removing the Provincial Sales Tax exemption on carbonated sugary drinks, and that includes those of the “diet” variety too.
“It’s a health issue,” Finance Minister Carole James said after the budget announcement. “We’re not bringing in a huge amount of revenue. We’re bringing in a small amount of revenue that certainly will help with health cost — this really is about changing behaviour.”
Tom Davidoff with UBC’s Sauder School of Business said in many cases, you ideally want to tax items you want to actively discourage.
“Sugary drinks they’re fun in the moment, certainly, for many of us,” he admitted. “But they’re also bad for us, they rot our teeth and make us fat.”
And while some have taken to social media to complain, others told CityNews they weren’t completely against slapping a tax on pop.
“That one, I hope it incentivizes people to buy less sugary drinks, so I think that’s a good thing,” one Vancouverite said, while another worried about the impact the tax would have on her wallet, as a big soda drinker.
“They all collect the PST and companies who have come in and are not headquartered in B.C. are not paying their fair shares,” James said.
Starting July 1, 2020, new requirements will mean any foreign seller of software and telecommunication – including streaming service providers like Netflix – will be required to register as tax collectors if their revenues exceed $10,000 in B.C. The new tax is buried in the budget document, a move the Canadian Taxpayers Federation has called “sneaky,” but a claim James refutes.
“Not at all, in fact, it’s in the documents, it’s right there in the budget,” James told NEWS 1130. “We’ve listed it as one of our directions, but it’s actually not about the resources coming in. It’s about fairness to British Columbia businesses. Whether you’re talking about Apple TV, whether you’re talking about Crave TV — they all collect the PST. And companies who have come in who are not headquartered in British Columbia aren’t paying their fair share. This is really about future-proofing our tax system. As we know, more and more people are buying things online. We want to make sure it’s a level playing field.”
On the CTF’s claim that the streaming tax is “sneaky,” @carolejames says it’s “not at all,” and that it’s right in the document. #bcpoli @NEWS1130 @CityNewsVAN #bcbudget2020 pic.twitter.com/9rcoPOkQZm
— Hana Mae Nassar (@HanaMaeNassar) February 19, 2020
Finally, those making more than $220,000 in B.C. — representing the top one per cent of earners, the province said — will start having to pay an additional four per cent in tax this year.
As of Jan. 1, 2020, a new personal income tax bracket was introduced. The changes now mean those making more the $220,000 will be subjected to a tax rate of 20.5 per cent, up from 16.8 per cent.
James said the revenue will help fund things like infrastructure improvements and services, in turn creating more jobs down the line.
A couple conversation items in BC #Budget2020
– higher earners will see nearly 4% personal tax increase (those making 220K+)
– pop drinkers will pay more the province removing PST food exemption on pop
– @kris_sims finding a sneaky #netflix tax totaling $16mil/year#bcpoli
— LizaYuzda (@LizaYuzda) February 18, 2020
-With files from Tom Walsh, CityNews Vancouver