The B.C. government’s budget for 2012, which the Business Council of BC has characterized as a “responsible” and “cautious” budget for uncertain times, notes the latest and final increase to the carbon tax in July 2012 and promises a review of the tax over the next year.
On July 1, 2012, the carbon tax will rise to 7.67 cents per litre, up from the current tax of 6.39 cents (i.e., to the maximum rate of $30 per tonne). Although no further increases are scheduled, a comprehensive government review could result in changes to revenue neutrality, among other details.
The review will also consider the impact of the tax on the competitiveness of BC businesses, including statements from the public. The Bc Trucking Association intends to participate and will be consulting members when more information about the review is available.
Of the business tax measures meant to keep the carbon tax revenue neutral for 2012, small businesses continue to benefit from the small business corporate income tax rate of 2.5 percent (which has been in place since 2008), but this year with an increase to the threshold to $500,000 from $400,000.
According to the Business Council of BC, which is a member of the B.C. Trucking Association — other highlights of the budget include:
• Balanced budget in 2013/14, with a modest surplus of $154 million.
• Government expenditures held to a three-year average annual growth of 2.0 percent, a significant reduction from the 6 percent average growth prior to the economic downturn.
• Net debt-to-GDP ratio to level off in 2014 at 18.2 percent – still among lowest in Canada.
• Small business tax rate to be held at 2.5 percent, with a provisional 1 percent increase to general corporate income tax rate in 2014/15 if revenue targets are not met.
The 2012 budget also provides initial plans for the transition back to the provincial sales tax (PST), which will be in place as of April 1, 2013. Further details are available at www.hstinbc.ca.