Premier announces personal tax cut

Contributed | Peachland News
October 27, 2010

In a rare occurrence, Premier Gordon Campbell announced a 15 per cent reduction in personal income tax rates during a televised speech tonight.

The 15 per cent reduction applies to the first $72,000 of personal income for all British Columbians. This is the second-largest personal income tax relief measure in B.C. history, according to a press release from the Office of the Premier, ensuring B.C. individuals pay the lowest provincial income tax in Canada, on incomes up to $130,000.

“Our government has always felt that the best thing we can do to support British Columbia’s families and our economy is to leave more money in people’s paycheques so they can make the decisions about what is best for themselves and their families,” said Campbell. “This new tax relief will inject $568 million into our economy and create new opportunities for families and individuals across British Columbia.”

Subject to legislative approval, the new 15 per cent rate reduction applies to earnings up to $72, 293, and is effective January 1, 2011. That tax relief will save individual B.C. taxpayers up to $616 annually. As a result, British Columbian individuals will continue to pay the lowest provincial income taxes in Canada up to $130,000 in earnings. For comparison, someone making $45,000 in Alberta would pay 64 per cent more than in B.C., a difference of $990. Someone in Quebec would pay 180 per cent more, a difference of $2,787.

This new tax relief builds on previous income tax relief measures, including a 25 per cent across-the-board personal income tax reduction in 2001. With this tax reduction, most taxpayers’ provincial income taxes have been reduced by at least 47 per cent since 2001. An additional 365,000 British Columbians pay no provincial income tax.

Premier Campbell also laid out three new steps the province will take to enhance early childhood learning and ensure B.C. students are entering school ready to learn and meeting targets for reading, writing and math.

“Right now in British Columbia one in five students who complete Grade 4 do not read, write or have math skills at a Grade 4 level. It’s important for us to find ways to help that 20 per cent of students do better. We know the answer is to invest in early childhood learning,” said Campbell. “It’s important that we make sure that every one of our children is lifted up to take full advantage of the opportunities that lie before them.”

New education measures announced by the premier are:

“These new measures are important steps to build confidence in B.C.’s middle income families,” said Campbell. “I know many families are living paycheque-to-paycheque. This tax relief means that all taxpayers will have more take-home pay. It will help families with their home economies and, as it does, it will help stimulate the provincial economy. We will continue to engage British Columbians in the months ahead on how we can work together on the issues that are most important to them.”

Backgrounder

Subject to approval of the legislature, the tax rates for the first two personal income tax brackets will be reduced by 15 per cent effective January 1, 2011, which reduces the income tax payable for all taxpayers.

For example, someone earning $40,000 will save $236 annually. Someone earning $72,293 or more will save $616 annually, and a two-income family earning $120,000 will save up to $944 annually.

As a result, individuals earning up to $130,000 will pay the lowest personal income taxes in Canada. For comparison, someone making $45,000 in Alberta would pay 64 per cent more than in BC, a difference of $990. Someone in Quebec would pay 180 per cent more, a difference of $2,787.

Campbell made the announcements during a televised address Wednesday night. The transcript of his address can be found here.