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B.C.’s tax take continued to climb during COVID-19 pandemic year

Federal billions offset loss in fees, licence revenues
B.C. government program spending, in millions, from 2016 to 2021. (B.C. finance ministry)

B.C.’s overall tax revenue increased by $900 million in the past year despite the COVID-19 pandemic, led by a $259 million increase in employer health tax and a $489 million jump in property transfer tax from a hot real estate market.

Personal income tax revenue to the province also grew by $461 million during 2020-21, “mainly reflecting a stronger income and tax base and a positive prior-year adjustment,” according to the audited public accounts released July 28 by the B.C. finance ministry.

Only corporate tax revenues decreased, by $206 million or 4.1 per cent, with tourism, hospitality and other businesses buffeted by the pandemic and public health orders. Commercial property tax revenues also fell as empty storefronts spread through cities, but those losses were offset by increases in provincial sales tax paid on most retail purchases.

Public sector employment rose quickly, led by health care spending and related jobs such as infection contact tracing, while private business laid off people or reduced hours. Government, finance and other functions were able to shift to remote work without significant disruption.

With deficits forecast for at least the next three years, provincial spending shot up by $8.6 billion in 2020-21. Of that, 9.2 per cent or $2.1 billion went to health care. Health Minister Adrian Dix says most increases to senior care home and other staff are permanent changes, with the province still below its own targets on daily care hours per resident as staff shortages persist.

B.C.’s capital spending plan for hospitals, schools, roads and transit was $1.7 billion under budget for 2020-21, as construction schedules fell behind in a year dominated by pandemic restrictions.

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