Bill 8 – 2017: Budget Measures Implementation Act, 2017

HONOURABLE MICHAEL DE JONG
MINISTER OF FINANCE

BILL 8 – 2017

BUDGET MEASURES IMPLEMENTATION ACT, 2017

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

SECTION 1: [Home Owner Grant Act, section 13.1]

adds authority for some uses and disclosures, and excludes from those permitted uses and disclosures information that was collected as a result of disclosure under the Income Tax Act;
adds authority for use and disclosure of information collected under the Act for the administration and enforcement of the Income Tax Act.

(a) in subsection (1) in paragraph (b) of the definition of "shared information" by adding "section 64 of the Income Tax Act," before "section 32 of the Property Transfer Tax Act",

(b) in subsection (2) (b) by striking out "or" at the end of subparagraph (iii) and by adding the following subparagraph:

(c) in subsection (3) by striking out "Subject to subsection (5)" and substituting "Subject to subsections (3.1) and (5)", and

(3.1) Subsection (3) does not permit a ministry person to use or disclose shared information collected as a result of a disclosure under the Income Tax Act if that use or disclosure is

(a) for the purposes of administering or enforcing the Land Tax Deferment Act, or

SECTION 2: [Income Tax Act, section 4.351] establishes a new BC back-to-school tax credit.

2 The Income Tax Act, R.S.B.C. 1996, c. 215, is amended by adding the following section:

BC back-to-school tax credit

4.351 (1) In this section, "qualifying child", in respect of an individual for a taxation year, means a child of the individual who is, immediately before the beginning of the calendar year in which the taxation year ends, at least 4 years of age but less than 17 years of age.

(2) For the purpose of computing the tax payable under this Act for a taxation year ending before January 1, 2019 by an individual, other than a trust, who was resident in British Columbia on the last day of the taxation year, there may be deducted the amount determined by the formula

(3) If more than one individual is entitled to a deduction under this section for a taxation year that ends in a calendar year in respect of a qualifying child, only one of those individuals may deduct an amount under this section for any taxation year that ends in the calendar year in respect of the qualifying child.

(4) If the individuals referred to in subsection (3) cannot agree which of those individuals may deduct an amount under this section in respect of the qualifying child, the minister may designate an individual who may deduct an amount under this section in respect of that qualifying child.

SECTION 3: [Income Tax Act, section 4.37] establishes a new volunteer firefighter or search and rescue volunteer tax credit.

Volunteer firefighter or search and rescue volunteer
tax credit

4.37 (1) For the purpose of computing the tax payable under this Act for a taxation year by an individual who is entitled to a deduction under section 118.06 (2) or 118.07 (2) of the federal Act for the year, there may be deducted an amount determined by multiplying $3 000 by the appropriate percentage for the year.

(2) If an amount is not included in computing the individual's income for a taxation year because of section 81 (4) of the federal Act, no deduction may be made under this section in computing the tax payable by the individual for the taxation year.

SECTION 4: [Income Tax Act, section 4.51] is consequential to the addition by this Bill of section 4.351 to the Act.

(a) in subsection (2) (b) by adding "4.351 [BC back-to-school tax credit]," after "4.35 [child arts credit],", and

(b) in subsection (4) in the description of "T" by adding "4.351 [BC back-to-school tax credit] ," after "4.35 [child arts credit] ,".

SECTION 5: [Income Tax Act, section 4.51] is consequential to the addition by this Bill of section 4.37 to the Act.

(a) in subsection (2) (b) by striking out "4.36 [BC education coaching tax credit]" and substituting "4.36 [BC education coaching tax credit] , 4.37 [volunteer firefighter or search and rescue volunteer tax credit]", and

(b) in subsection (4) in the description of "T" by striking out "4.36 [BC education coaching tax credit]" and substituting "4.36 [BC education coaching tax credit], 4.37 [volunteer firefighter or search and rescue volunteer tax credit]".

SECTION 6: [Income Tax Act, section 4.61] extends the education tax credit for the 2017 taxation year.

(a) in subsection (1) by striking out "a taxation year by an individual who is entitled to a deduction under section 118.6 (2) of the federal Act for the year" and substituting "the 2017 taxation year by an individual who would be entitled to a deduction under section 118.6 (2) of the federal Act for that taxation year if that section, as it read in its application to the 2016 taxation year, applied to the 2017 taxation year", and

(b) in subsection (2) by striking out "federal Act apply" and substituting "federal Act, as that section read in its application to the 2016 taxation year, applies".

SECTION 7: [Income Tax Act, section 4.62] is consequential to the addition by this Bill of section 4.351 to the Act.

(b) in subsection (2) in the description of "C" by adding the following paragraph:

SECTION 8: [Income Tax Act, section 4.62] is consequential to the addition by this Bill of section 4.37 to the Act.

(iii.5) section 4.37 [volunteer firefighter or search and rescue volunteer tax credit]; , and

(b) in subsection (2) in the description of "C" by adding the following paragraph:

(c.5) section 4.37 [volunteer firefighter or search and rescue volunteer tax credit]; .

SECTION 9: [Income Tax Act, section 4.65] is consequential to the addition by this Bill of section 4.351 to the Act.

9 Section 4.65 is amended in paragraphs (a) and (b) (ii) of the description of "C" by adding "4.351 [BC back-to-school tax credit] ," after "4.35 [child arts credit],".

SECTION 10: [Income Tax Act, section 4.65] is consequential to the addition by this Bill of section 4.37 to the Act.

10 Section 4.65 is amended in paragraphs (a) and (b) (ii) of the description of "C" by adding "4.37 [volunteer firefighter or search and rescue volunteer tax credit]," after "4.36 [BC education coaching tax credit],".

SECTION 11: [Income Tax Act, section 4.66] is consequential to the addition by this Bill of section 4.351 to the Act.

11 Section 4.66 (a) is amended in the description of "B" by adding "4.351 [BC back-to-school tax credit]," after "4.35 [child arts credit],".

SECTION 12: [Income Tax Act, section 4.66] is consequential to the addition by this Bill of section 4.37 to the Act.

12 Section 4.66 (a) is amended in the description of "B" by adding "4.37 [volunteer firefighter or search and rescue volunteer tax credit]," after "4.36 [BC education coaching tax credit],".

SECTION 13: [Income Tax Act, section 4.69] reduces for the 2017 and subsequent taxation years the percentage applied in determining the dividend tax credit for income taxed at the small business rate.

SECTION 14: [Income Tax Act, section 4.721] amends the definition of "BC flow-through mining expenditure" to extend by one year the time frame in which expenses referred to in the definition are incurred, and makes consequential amendments.

(a) in subsection (1) in paragraph (d) of the definition of "BC flow-through mining expenditure" by striking out "before 2017" and substituting "before 2018", and

(b) in subsection (1.1) by striking out "before 2017" in both places and substituting "before 2018".

SECTION 15: [Income Tax Act, sections 4.74 and 4.76] is consequential to the addition by this Bill of section 4.37 to the Act.

15 Sections 4.74 (a) and 4.76 (1) (b) (i) are amended by adding "4.37 [volunteer firefighter or search and rescue volunteer tax credit]," after "4.36 [BC education coaching tax credit],".

SECTION 16: [Income Tax Act, sections 4.74 and 4.76] is consequential to the addition by this Bill of section 4.351 to the Act.

16 Sections 4.74 (b) and 4.76 (1) (b) (ii) are amended by adding "4.351 [BC back-to-school tax credit]," after "4.31 [age credit],".

SECTION 17: [Income Tax Act, section 4.77] is consequential to the addition by this Bill of section 4.37 to the Act.

(c.1) section 4.37 [volunteer firefighter or search and rescue volunteer tax credit]; .

SECTION 18: [Income Tax Act, section 4.78] is consequential to the addition by this Bill of section 4.351 to the Act.

SECTION 19: [Income Tax Act, section 4.78] is consequential to the addition by this Bill of section 4.37 to the Act.

(c.5) section 4.37 [volunteer firefighter or search and rescue volunteer tax credit]; .

SECTION 20: [Income Tax Act, section 4.79] is consequential to the addition by this Bill of section 4.351 to the Act.

SECTION 21: [Income Tax Act, section 4.79] is consequential to the addition by this Bill of section 4.37 to the Act.

(d.5) section 4.37 [volunteer firefighter or search and rescue volunteer tax credit]; .

SECTION 22: [Income Tax Act, section 16] reduces the small business corporate tax rate from 2.5% to 2% effective April 1, 2017.

22 Section 16 (1) (a) and (b), (2) (a) and (b) and (4) is amended by striking out "2.5%" and substituting "2%".

SECTION 23: [Income Tax Act, section 16] pauses the phase-out of the preferential tax rate for credit unions.

23 Section 16 (2) (a) is amended in the description of "E" by repealing subparagraphs (ii) to (vi) and substituting the following:

(ii) for any taxation year, or part of a taxation year, that is after December 31, 2015, the applicable amount for that taxation year or part is determined by dividing the number of days in the taxation year that are after December 31, 2015 by the total number of days in that taxation year and multiplying the result by 0.8, and .

SECTION 24: [Income Tax Act, section 25.1]

amends the definition of "excluded expense" to add an exception for expenses incurred after February 28, 2015 in relation to environmental studies or community consultations;
amends the definition of "qualified mining exploration expense" to include expenses incurred after February 28, 2015 in relation to environmental studies or community consultations;
is consequential to the amendment made by this Bill to the definition of "qualified mining exploration expense".

(a) in subsection (1) in paragraph (a) of the definition of "excluded expense" by adding "other than an expense incurred after February 28, 2015 for environmental studies or community consultations undertaken to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of a mineral resource in British Columbia," after "the federal Act,",

(b) in subsection (1) in paragraph (c) of the definition of "qualified mining exploration expense" by striking out everything after "including" and substituting the following:

(i) such an expense incurred after February 28, 2015 for environmental studies or community consultations, including environmental studies or community consultations undertaken to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of a mineral resource in British Columbia, and

SECTION 25: [Income Tax Act, section 25.1] is consequential to the amendment made by this Bill to section 4.721 of the Act.

(a) in paragraph (f.2) (i) of the definition of "excluded expense" by striking out "before January 1, 2017" and substituting "before January 1, 2018", and

(b) in paragraph (f.2) (ii) of the definition of "excluded expense" by striking out "after December 31, 2016" and substituting "after December 31, 2017" and by striking out "before January 1, 2018" and substituting "before January 1, 2019".

SECTION 26: [Income Tax Act, section 64] adds authorization for the provision of taxpayer information for the administration and enforcement of the Home Owner Grant Act.

(iii.3) to an official solely for the purposes of the administration or enforcement of the Home Owner Grant Act, including for greater certainty a purpose set out in section 13.1 (3) (b) (ii) or (iii) or (c) of that Act, except in respect of court proceedings related to the Land Tax Deferment Act, .

SECTION 27: [Income Tax Act, section 77.2] adds a requirement that the British Columbia Assessment Authority provide the Minister of National Revenue and the Commissioner of Income Tax assistance and access to its records at no charge.

British Columbia Assessment Authority must provide information

77.2 The British Columbia Assessment Authority must provide, without charge, assistance and access to its records to the minister and the Commissioner of Income Tax.

SECTION 28: [Income Tax Act, section 97] extends by 5 years the availability of the scientific research and experimental development tax credit.

28 Section 97 is amended in paragraph (b) of the definition of "BC qualified expenditure" by striking out "September 1, 2017" and substituting "September 1, 2022".

SECTION 29: [Income Tax Act, section 111] extends by 2 years the availability of the book publishing tax credit.

29 Section 111 (1) is amended in the definition of "CBF contribution" by striking out "April 1, 2017" and substituting "April 1, 2019".

SECTION 30: [Income Tax Act, section 117] extends by 3 years the time period for eligible individuals to claim training tax credits.

30 Section 117 is amended by striking out "January 1, 2018" and substituting "January 1, 2021".

SECTION 31: [Income Tax Act, section 121] extends by 3 years the time period for eligible employers to claim training tax credits.

31 Section 121 is amended by striking out "December 31, 2017" and substituting "December 31, 2020".

SECTION 32: [Income Tax Act, section 132] repeals and replaces the definition of "interactive digital media product" to include a product that

meets all of the requirements described in paragraph (a) (i), (iii) and (v) of that definition, as enacted by this Bill,
is designed primarily to entertain the user, and
augments the user's perception of reality or allows the user to experience a virtual reality, or both.

32 Section 132 is amended by repealing the definition of "interactive digital media product" and substituting the following:

(i) consists of a combination of application files and data files, in a digital format, that are integrated and are intended to be operated together,

(iii) is capable of presenting information in at least 2 of the following forms:

(i) meets all of the requirements described in paragraph (a) (i), (iii) and (v),

(A) augments the user's perception of reality by superimposing digital information onto the user's field of vision;

SECTION 33: [Income Tax Act, section 133]

amends the eligibility criteria for the interactive digital media tax credit to provide that corporations with eligible salary and wages of greater than $2 million are eligible for the tax credit without having to meet the principal business criteria;
allows corporations registered under Part 2 of the Small Business Venture Capital Act to be eligible for the interactive digital media tax credit under Part 10 of the Income Tax Act.

(i) the corporation's eligible salary and wages, as determined under section 134 (2) for the taxation year, is equal to or greater than $2 million;

(ii) the corporation's eligible salary and wages, as determined under section 134 (2) for the taxation year, is greater than $100 000 and less than $2 million and either of the following applies:

(A) the corporation's principal business in the taxation year is the development of interactive digital media products;

(B) all or substantially all of the corporation's business in the taxation year consists of one or both of the following:

(II) the provision of eligible activities to a corporation that has a permanent establishment in British Columbia and whose principal business is the development of interactive digital media products. ,

(b) in subsection (2) by striking out everything after "365 days," and by adding the following paragraphs:

(a) the reference in subsection (1) (d) (i) and (ii) to $2 million is to be read in respect of the corporation as a reference to the amount equal to that proportion of $2 million that the number of days in the taxation year bears to 365, and

(b) the reference in subsection (1) (d) (ii) to $100 000 is to be read in respect of the corporation as a reference to the amount equal to that proportion of $100 000 that the number of days in the taxation year bears to 365. ,

(d) in subsection (3) (h) by striking out "paragraphs (a) to (g)" and substituting "paragraphs (a) to (f)".

SECTION 34: [Income Tax Act, section 134] limits the eligible salary and wages incurred in respect of a product described in paragraph (b) of the definition of "interactive digital media product", as enacted by this Bill, to salary and wages incurred on or after February 22, 2017.

34 Section 134 (2) is amended in paragraph (b) (ii) of the description of "eligible salary and wages" by striking out "September 1, 2010, and" and substituting "September 1, 2010 or, in the case of salary or wages incurred in respect of a product described in paragraph (b) of the definition of "interactive digital media product" in section 132 of this Act, on or after February 22, 2017, and".

SECTION 35: [Motor Fuel Tax Act, section 1] amends the definition of "locomotive fuel" to exclude natural gas.

35 Section 1 of the Motor Fuel Tax Act, R.S.B.C. 1996, c. 317, is amended in the definition of "locomotive fuel" by adding "and natural gas" after "propane".

SECTION 36: [Property Transfer Tax Act, section 4] increases by $25 000 the dollar amount in respect of which the first time home buyer tax exemption may be applied.

36 Section 4 (1) of the Property Transfer Tax Act, R.S.B.C. 1996, c. 378, is amended in the definition of "qualifying value" by striking out "$475 000" and substituting "$500 000".

SECTION 37: [Provincial Sales Tax Act, section 34] provides for a rate of tax on the purchase price of electricity.

37 Section 34 of the Provincial Sales Tax Act, S.B.C. 2012, c. 35, is amended by adding the following subsection:

(10) The rate of tax payable under sections 37, 49 (6) (a), 52, 81, 82, 84 and 86 on electricity is 3.5% of the purchase price of the electricity.

SECTION 38: [Provincial Sales Tax Act, section 34] repeals the rate of tax on the purchase price of electricity.

SECTION 39: [Provincial Sales Tax Act, section 36] provides for a rate of tax on the fair market value of electricity.

(10) The rate of tax payable under section 49 (6) (c) on electricity is 3.5% of the fair market value of the electricity on the entry date of the electricity.

SECTION 40: [Provincial Sales Tax Act, section 36] repeals the rate of tax on the fair market value of electricity.

SECTION 41: [Provincial Sales Tax Act, section 140.1] provides for an exemption from tax imposed under Part 3 of the Act on electricity.

Exemption in relation to electricity

SECTION 42: [Provincial Sales Tax Act, section 141] is consequential to the addition by this Bill of section 140.1 to the Act.

42 Section 141 (3) is amended by striking out ", other than electricity used in an electrolytic process,".

SECTION 43: [Tobacco Tax Act, section 2] increases the tax on cigarettes to 24.7¢ per cigarette and the tax on tobacco, other than cigars or cigarettes, to 24.7¢ per gram.

43 Section 2 (2) and (3) of the Tobacco Tax Act, R.S.B.C. 1996, c. 452, is amended by striking out "23.9¢" and substituting "24.7¢".

SECTION 44: [Provincial Sales Tax Act transition – applicable rate for electricity] provides for the implementation of the new rates of tax on electricity, added to the Act by this Bill.

Provincial Sales Tax Act transition – applicable rate for electricity

(2) For the purposes of section 37 of the Act, the applicable rate under section 34 (10) of the Act does not apply in respect of any consideration for the purchase of electricity that, before October 1, 2017, becomes due or is paid without having become due.

(3) If all or any portion of the consideration for the purchase of electricity is not ascertainable before October 1, 2017, for the purposes of section 37 of the Act, the applicable rate under section 34 (10) of the Act applies in respect of that or any portion of that consideration that becomes ascertainable on or after October 1, 2017.

(4) For the purposes of sections 49 and 52 of the Act, the applicable rate under sections 34 (10) and 36 (10) of the Act does not apply in relation to electricity if, before October 1, 2017,

(5) If it is not ascertainable when electricity is brought or sent into British Columbia or when delivery of electricity is received in British Columbia, for the purposes of sections 49 and 52 of the Act, the applicable rate under sections 34 (10) and 36 (10) of the Act applies in relation to electricity for which it is ascertainable that, on or after October 1, 2017,

(6) For the purposes of sections 81 and 84 of the Act, the applicable rate under section 34 (10) of the Act applies in relation to electricity if the person referred to in section 81 or 84 of the Act first becomes a user of the electricity on or after October 1, 2017.

(7) For the purposes of sections 82 and 86 of the Act, the applicable rate under section 34 (10) of the Act applies in relation to electricity if, on or after October 1, 2017, a person subsequently uses that electricity, or allows that electricity to be used, for a purpose for which the person must then pay tax under section 82 (1) or 86 (1) of the Act.

SECTION 45: [Provincial Sales Tax Act transition – exemption for electricity] provides for the implementation of the exemption from tax on electricity, added to the Act by this Bill.

Provincial Sales Tax Act transition – exemption for electricity

(2) For the purposes of exempting electricity from tax imposed under section 37 of the Act, section 140.1 of the Act does not apply in respect of any consideration for the purchase of electricity that, before April 1, 2019, becomes due or is paid without having become due.

(3) If all or any portion of the consideration for the purchase of electricity is not ascertainable before April 1, 2019, for the purposes of exempting electricity from tax imposed under section 37 of the Act, section 140.1 of the Act applies in respect of that or any portion of that consideration that becomes ascertainable on or after April 1, 2019.

(4) For the purposes of exempting electricity from tax imposed under section 49 or 52 of the Act, section 140.1 of the Act does not apply in relation to electricity if, before April 1, 2019,

(5) If it is not ascertainable when electricity is brought or sent into British Columbia or when delivery of electricity is received in British Columbia, for the purposes of exempting electricity from tax imposed under section 49 or 52 of the Act, section 140.1 of the Act applies in relation to electricity for which it is ascertainable that, on or after April 1, 2019,

Commencement

46 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table:

Explanatory Notes