Federal and provincial budgets do affect you

February was budget month. BC NDP Finance Minister Carole James brought down her first budget on Feb. 13 and two weeks later, Bill Morneau presented his third budget for the federal Liberal government.

Should you be concerned with these budgets or were they both ho-hum non-events for you?

Frankly, if you care about your money (and you should), then you need to know how these budgets can affect you and what the governments propose to do with your money.

I say your money because that is exactly what the governments are planning to spend. Your money sent to Victoria and Ottawa as taxes.

The B.C. budget projects a surplus of $219 million for 2018-19. Here are some things that may affect you:

Speculation tax — the government will apply a 0.5 per cent speculation tax in 2018 on homes owned by people who do not pay taxes in B.C. This tax goes up to two per cent in 2019 and future years. So if you have family or friends who live in Alberta and they own a vacation home in the Okanagan — they will be affected.

Foreign buyers tax — currently foreign home buyers pay a 15 per cent tax and this has increased to 20 per cent effective the day of the budget.

This tax applies to homes in Metro Vancouver, Capital Regional District, the Fraser Valley, Kelowna and West Kelowna and the Nanaimo Regional District.

Eliminating MSP by 2020 — Starting in 2019, the B.C. government will collect an Employer Health Tax from businesses operating in the province. The bigger your payroll, the more tax you will pay. For 2018, Medical Services Plan premiums were cut by 50 per cent.

Property transfer tax — for properties costing over $3 million, this tax increases from three per cent to five per cent.

Affordable child care benefit — for parents who have their children in licensed child care, a new credit of $350 per month will go directly to the child-care facility to have the savings passed onto the parents.

Shelter aid for elderly renters — low-income seniors who rent their living quarters will see an increase in the rental assistance programs and help those with annual incomes of $40,000 or less.

Fire recovery funding — the government is adding $72 million into this fund. We certainly have been affected in the Okanagan by fires in 2017.

Fair PharmaCare — the annual deductible will be eliminated for prescriptions and medical expenses for families with incomes below $30,000.

Indigenous skills training program — this provides $201 million for Indigenous Skills Training and Aboriginal Friendship Centres.

Luxury tax on cars — high-end cars worth more than $150,000 purchased in B.C. will now be subject to a 20 per cent luxury tax.

Our federal government plans to spend over $311.3 billion this year. This results in a deficit of $17.8 billion as projected revenues are estimated at $293.5 billion.

Gender equity — the federal budget proposes pay-equity legislation for employees in the federal service and those in federally regulated areas. However, there was no dollar value put on this plan.

Parental leave — a five-week “use it or lose it” incentive for new fathers to take parental leave is proposed. $1.2 billion has been pledged over five years for this benefit.

Canada workers benefit — the plan is to revamp this tax credit to increase the net pay of lowincome workers with changes commencing in 2019.

Pharmacare — a national Pharmacare program could mean savings for both the patient and the government.

This budget proposes setting up an advisory council to conduct an economic assessment and study the feasibility of a national program.

Small business tax reform — passive income of more than $50,000 earned in corporations will be taxed at higher rates.

Journalism — the government proposes to provide $50 million over five years to one or more non-governmental organizations that support local journalism in under-served communities.

Of course both these provincial and federal budgets are just that — an estimate of the revenues and expenses the government will incur over the next fiscal period ending March 2019.

The devil is in the details and more will become clearer in the coming months.

Marion Wahl is a chartered professional accountant. Call her at 250-762-3362 or email at marionpwahl@shaw.ca.