On Feb. 28, the B.C. government released its 2023 budget. The following are highlights of the key tax measures.

Personal tax measures

No personal income tax rate changes were announced in this year’s budget. The current personal combined income tax rates for 2023 are outlined below:

Climate Action Tax Credit

Effective July 1, 2023, the maximum annual Climate Action Tax Credit is increased from $193.50 to $447 for an adult, from $193.50 to $223.50 for a spouse or common‑law partner and from $56.50 to $111.50 per child. Single‑parent families will continue to receive the spouse or common‑law partner amount for the first child in the family.

Renter’s Tax Credit

Effective Jan. 1, 2023, a new refundable Renter’s Tax Credit is introduced. Eligible households renting and occupying living accommodations in B.C. for at least six months in a calendar year can claim the credit. The credit will be income‑tested with a maximum amount of $400 per year for households with adjusted income up to $60,000. Households with adjusted income above the $60,000 threshold will receive a gradually reduced credit, reaching zero at $80,000 based on the 2023 taxation year. Thresholds will be indexed to inflation each year.

Eligibility for this tax credit excludes amounts paid for a campsite, moorage or manufactured home site, under a rent‑to‑own plan, or by employers for accommodation not required to be included as income. To qualify, rent must be paid to unrelated persons. The credit is available for individuals who have reached the age of 19 and are resident in B.C. on December 31 each year.

Corporate tax measures

No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2023 are outlined below:

Production Services Tax Credit

Effective July 1, 2020, this tax credit is amended to allow corporations to claim labour expenditures incurred up to 120 days prior to the pre‑certification form submission date under the credit, regardless of how late the pre‑certification form was filed. This will only apply to film productions that incurred their first eligible accredited labour expenditure between July 1, 2020 and Feb. 21, 2022.

Carbon Tax Act

Effective April 1, 2023, carbon tax rates are increased by $15 per tonne of carbon dioxide equivalent emissions (CO2e) annually until reaching $170 per tonne in 2030. Rates will generally align with the federal carbon pricing backstop rates, where applicable.

Effective April 1, 2024, large emitters will be exempt from tax imposed under the Carbon Tax Act. These operations will instead be subject to a made‑in‑B.C. output‑based pricing system (OBPS), under which they will pay for emissions exceeding performance‑based emissions limits. Certain operations that do not meet the threshold for regulation under the OBPS may opt in.

Effective April 1, 2023, qualifying commercial greenhouse growers can claim a point‑of‑sale reduced carbon tax for purchases of natural gas and propane used for heating and generating CO2 for increased crop productivity. The point‑of‑sale reduced tax will apply to greenhouse growers that grow vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings or nursery landscape plants. To qualify, growers must grow the crops identified above and generate gross revenues of $20,000 or more in the previous 12 months, and have a reasonable estimate that revenues will be $20,000 or more in the next 12 months.

Tax credit measures

Farmers’ Food Donation Tax Credit extended

This tax credit is extended for three years to the end of 2026.

Interactive Digital Media Tax Credit extended

This tax credit is extended for five years to Aug. 31, 2028.

Provincial sales tax measures

Automated external defibrillators

Effective March 1, 2023, automated external defibrillators (AEDs) are exempt from provincial sales tax. In addition, kits containing AEDs and parts and services for AEDs, including pads, are exempt from provincial sales tax.

Provincial Sales Tax Act amendments

Effective April 1, 2013, to clarify that, for the purposes of the provincial sales tax, the federal goods and services tax does not form part of the taxable purchase price of goods brought or sent into B.C. for use;

Effective Sept. 1, 2022, to clarify that, for the purposes of the provincial sales tax, the federal luxury tax imposed under the Select Luxury Items Tax Act does not form part of the taxable purchase price or lease price; and

Effective July 1, 2023, to ensure that heated tobacco products are not included in the definition of “vapour product”. This change makes a temporary correction permanent, meaning heated tobacco products will continue to be subject to tobacco tax, as well as the base seven per cent provincial sales tax.

Other tax measures

Motor Fuel Tax Act

Effective April 1, 2023, the refund rates for International Fuel Tax Agreement licensees are increased to reflect scheduled increases in the carbon tax each April 1 from 2023 through to 2030.

Online marketplace facilitators and online marketplace services

Effective July 1, 2023, the rules related to collection obligations of online marketplace facilitators and taxation of online marketplace services are amended for clarification, simplification and consistency. In particular, the rules are amended such that online marketplace services are taxable when an online marketplace facilitator provides the service to facilitate the sale or provision of non‑taxable services. The rules establishing when an online marketplace service is taxable are amended to align more closely with the place‑of‑supply rules used to administer the federal goods and services tax.

Property Transfer Act

Effective for transactions occurring on or after Jan. 1, 2024, purchases of new purpose‑built rental buildings will be exempt from the further two per cent property transfer tax that is applied to the fair market value of the residential component of a taxable transaction exceeding $3 million. Purpose‑built rental buildings are those that are non‑stratified and held as rental, on a monthly basis or longer, for at least 10 years. The residential portion of the building must be entirely for rental and have at least four apartments.

Property Tax

Effective on Royal Assent, the Nisga’a Nation will have the ability to establish property tax exemptions for Nisga’a citizens for property on Nisga’a Lands.

Effective on Royal Assent, Treaty First Nations will have the ability to establish property tax exemptions for Treaty First Nation members or constituents for property on their treaty lands.

Speculation and Vacancy Tax Act

Effective Nov. 27, 2018, the act is amended to clarify who is a corporate interest holder in respect of a corporation that owns residential property when a receiver of the corporation is appointed.

The regulations are being amended to clarify geographic areas used to determine annual fair market rent for residential property. The annual fair market rent is used for purposes of applying the non‑arm’s length tenancy exemption if the owners are untaxed worldwide earners (satellite families) or foreign owners.

Next steps

Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.

Meet the Author

Brenda L. Scott
National Office
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