British Columbia

B.C. United promises major income tax cut if elected

As B.C. United continues to struggle in the polls, Leader Kevin Falcon pitched his party's biggest promise to date: eliminating the provincial income tax on the first $50,000 earned by every British Columbian.

Leader Kevin Falcon says 'largest middle-class tax cut in B.C.'s history' would save earners $2,050 a year

A white man with black hair, wearing glasses, speaks in an outdoor environment.
B.C. United Leader Kevin Falcon has promised to eliminate provincial income tax on the first $50,000 earned by every British Columbian if he becomes premier. (Ben Nelms/CBC)

A B.C. United government would eliminate the provincial income tax on the first $50,000 earned by every British Columbian, Leader Kevin Falcon announced Tuesday. 

The move would save British Columbians an average of $2,050 a year each at a time when people are struggling to afford the rising cost of living, Falcon said. 

The tax cut would cost the province $5.4 billion in tax revenue, B.C. United says.

"Today, I am proud to announce the largest middle-class tax cut in British Columbia's history," Falcon said during an announcement in Victoria on Tuesday morning outside the legislature.

"Our plan would result in the complete elimination of income tax for 60 per cent of taxpayers including seniors, students and those just starting out their careers while putting over $2,000 a year back in the pockets of British Columbians."

WATCH | Falcon touts pledge as fiscally responsible: 

B.C. United leader says proposed drastic income tax cut is fiscally responsible

4 months ago
Duration 9:06
Kevin Falcon says his pledge to eliminate the provincial income tax on the first $50,000 earned by every British Columbian is a response to the reigning NDP spending tax dollars incorrectly.

It's the biggest policy proposal announced so far by the official Opposition, as B.C. United continues to lag behind the B.C. Conservatives in opinion polls. 

A poll of decided voters released this week by Leger shows just 10 per cent of people surveyed intended to vote for B.C. United, while 39 per cent intended to vote for the B.C. Conservatives. The survey showed 42 per cent of those asked intended to vote for the ruling B.C. NDP.

The poll does not include undecided voters.

The online survey was conducted Aug. 2-5 among 1,001 British Columbians aged 18 or older, randomly recruited from Leger's online panel. 

A margin of error cannot be associated with a non-probability sample in a panel survey. 

Proposed tax cut details

Falcon said the provincial income tax cut would be applied directly to people's paycheques, saving them about $100 every two weeks. 

The party, citing Canada Revenue Agency data, says 2.4 million B.C. taxpayers earn less than $50,000 a year. 

Right now, anyone who makes $11,980 a year or less does not pay provincial income tax, but the B.C. United plan would raise that exemption to the first $50,000.

Falcon said the marginal tax rate will not change for higher income earners, who will also have their provincial income tax waived on the first $50,000.

Reaction

During an unrelated news conference in Penticton on Tuesday, Premier David Eby slammed the B.C. United plan, saying it would result in a dramatic cut to the services British Columbians rely on, including health care, education and transportation.

"[Falcon] will propose to do this in the same way that he did it before," Eby said, alluding to Falcon's time as a cabinet minister in the B.C. Liberal government from 2001 to 2013.

"'Oh, don't worry, I'll cut your taxes over here. But you'll pay MSP, you'll pay road tolls, bridge tolls ... your ICBC rates will go up.' They'll sell off public assets to pretend that the books are balanced."

A tall man wearing a suit and an open-collared white shirt speaks during an announcement.
Premier David Eby slammed the proposal by B.C. United to cut provincial income taxes, saying it would lead to massive cuts to health care and education. (Darryl Dyck/The Canadian Press)

B.C. Greens Leader Sonia Furstenau said in a statement that B.C. United's proposed tax cut is "reckless and shows a lack of economic understanding, especially with a potential recession looming. Their $5.4 billion proposal, combined with a promise to balance the budget, would result in $12.4 billion in cuts when we need services the most."

Furstenau said the former B.C. Liberal government cut services in the early 2000s, which "eroded B.C.'s social safety net. Now we're seeing the same party with a new name propose that more services be slashed."

Falcon insisted he would not cut social services to offset the $5.4 billion hit to the provincial coffers, but instead would find savings in the "government waste" he claims has ballooned under the B.C. NDP.

Falcon said one the "great myths of the left" is that all their spending is important. However, he said health administrative costs have skyrocketed under the NDP, while British Columbians are facing the "worst health outcomes we've ever seen."

Iglika Ivanova, an economist with the B.C. branch of the Canadian Centre for Policy Alternatives, said "implementing this policy would actually be a disaster for the province."

"I think it's delusional that you wouldn't see service cuts when you punch that big a hole in provincial revenues," she said. 

Tegan Hill, an economist with the Fraser Institute, disagreed, saying the estimated $5.4 billion revenue loss could be reduced by the positive economic benefits that could come from the tax cut. 

"B.C. is decidedly uncompetitive on personal income taxes," Hill told CBC News. "So, work needs to be done there. This is an important step forward but certainly the issue is broader than eliminating this bottom tax bracket."

During the 2020 election, former B.C. Liberals Leader Andrew Wilkinson announced that if elected, he would cut the seven per cent provincial sales tax for one year and then bring it back at a reduced rate of three per cent until the economy recovered from the pandemic. 

ABOUT THE AUTHOR

Katie DeRosa

Provincial affairs reporter

Katie DeRosa is the provincial affairs reporter for CBC British Columbia. She is based in Victoria. You can contact her at katie.derosa@cbc.ca.