2022 Provincial Budget Highlights

On February 22, 2022, BC’s Ministry of Finance released the province’s 2022 Budget. A summary of the BC Budget key highlights is provided below.

Income Tax Measures

There have been no proposed income tax rate changes. Income tax measures proposed in the Budget include the following:

  • The scientific research and experimental development (SR&ED) tax credit is extended for five years to August 31, 2027.
  • Effective February 23, 2022, a temporary clean buildings refundable tax credit is introduced. The tax credit will be of 5% of qualifying expenditures for retrofits that improve the energy efficiency of eligible commercial and multi-unit residential buildings. Eligible expenditures must be made before April 1, 2025, and under a contract entered into after February 22, 2022.
  • Effective for the 2022-2024 years, the annual maximum venture capital tax credit is increased from $38.5 million to $41 million, with the $2.5 million increase being allocated to clean technology businesses.
  • The shipbuilding and ship repair industry tax credit is extended two years to the end of 2024.
  • The training tax credits for apprentices and employers are extended two years to the end of 2024.
  • Effective February 22, 2022, the production services tax credit for accredited film or video production corporations is amended to extend the pre-certification filing deadline from 60 days to 120 days.

Provincial Sales Tax Measures (“PST”) 

PST related measures announced in the Budget include the following:

  • Effective February 23, 2022, used zero-emission vehicles (“ZEVs”) are exempt from PST. This measure applies to all motor dealer sales, and private sales of ZEVs that have been driven for at least 6,000 kilometers. The exemption applies for five years and is schedule to end on February 22, 2027.
  • Effective February 23, 2022, the passenger vehicle surtax threshold for ZEVs is increased from $55,000 to $75,000. This measure applies for five years and is scheduled to end on February 22, 2027.
  • Effective April 1, 2022, heat pumps are exempt from PST, and PST on fossil fuel combustion systems that heat or cool buildings or water is increased from 7% to 12%.
  • Effective July 1, 2022, business that are marketplace facilitators for sales or leases of certain goods, services or software for third parties will be required to collect and remit tax on certain BC sales and leases. Marketplace facilitators will also be required to charge PST on marketplace services they provide to sellers. As a result of this measure, sellers will be relieved of their obligation to collect and remit tax on sales and leases made through a marketplace facilitator.
  • Effective July 1, 2022, the PST exemption for tobacco is removed.
  • Effective October 1, 2022, the tax on private sales (excluding trade-ins) of motor vehicles will be based on the greater of the reported purchase price and the average wholesale value of the vehicle.

Speculation and Vacancy Tax 

Measures related to the Speculation and Vacancy Tax Act announced in the Budget include the following:

  • The exemption for strata accommodation properties (strata hotels) that applies to a residential property is made permanent and is available for 2018 and later tax years.
  • For the 2021 tax year only, the exemption for hazardous or damaged residential property is expanded to apply to homeowners whose principal residence or tenancy exemption was affected by the flooding in the Fraser Valley (Abbotsford, Chilliwack and Mission).

If you have any questions or would like further information relating to the 2022 budget and its impact on you, please contact your Smythe advisor. To read our 2022 Federal Budget Highlights, click here.