OTTAWA (Reuters) - The government of Canada’s British Columbia province on Tuesday promised in its budget on Tuesday to raise taxes on high earners and on sugary drinks, while projecting a surplus this year and next.
In an address to the provincial legislature, B.C. Finance Minister Carole James said individuals with a taxable income of more than C$220,000 ($166,000) will see their tax rate jump to 20.5% from 16.8%, effective Jan. 1, 2020. Nearly half the revenue collected, James said, will come from people making more than C$1 million annually and help fund services and infrastructure.
“This will help deliver the infrastructure and services that create good jobs and keep B.C.’s economy moving,” the finance minister said.
The province will also begin charging a 7% provincial sales tax on carbonated beverages that contain sugar, natural or artificial sweeteners effective July 1 in an attempt to deter consumers, especially teenagers, away from soft drinks like pop.
Elected in 2017, B.C.’s left-leaning NDP government, which holds power in a coalition with the B.C. Green party, has focused its economic policies on controlling costs for families.
The 2020 budget also includes funding for a new post-secondary education grants, housing, the province’s struggling forestry sector and climate action.
As expected, James put forward a stay-the-course style budget in the face of slowing economic growth, lower commodity prices and ongoing economic uncertainty globally.
The provincial legislature must still vote on the budget.
The government forecast in its November fiscal update that B.C.’s economy would grow by 1.7% in 2019 and 1.9% in 2020.
On Tuesday, the province revised its 2020 real GDP forecast up slightly to 2.0% from 1.9%, while its 2021 forecast edged down to 1.9% from 2.0%.
Total revenues for the 2020-21 fiscal year were set at C$60.6 billion, while expenses were expected to be C$60.1 billion. A surplus of C$227 million was estimated for 2020-21, rising to C$374 million 2022-23.
Total provincial debt is projected to be C$49.2 billion at the end of the current fiscal year, growing to C$58.6 billion by 2022-23. The province’s debt-to-GDP ratio is expected to remain near 17% over the next three years.
Tuesday’s budget comes just hours after environmental activists gathered outside B.C. Premier John Horgan’s home as part of a failed attempt a “citizen’s arrest” aimed at preventing Horgan from attending the day’s budget proceedings. Three people were arrested, police said.
Reporting by Kelsey Johnson in Ottawa; Editing by Lisa Shumaker
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