The B.C. NDP is proposing to collect an extra $550 million a year in new tax revenues from large businesses, high-income earners and financial institutions in their first year of an NDP government.
By the third year, another $100 million would be raised from extra carbon tax on the oil and gas industry, NDP finance critic Bruce Ralston announced at a news conference in Vancouver Thursday.
The B.C. Liberals’ February budget raised the corporate income tax rate to 11 per cent. The NDP would increase it to 12 per cent on Oct. 1, which Ralston said would raise an extra $200 million a year. The small business income rate would be left at 2.5 per cent, applied to firms with annual revenue up to $500,000. Another $150 million is expected to come from a capital tax on financial institutions.
Ralston revealed a rate of three per cent for banks and one per cent for larger credit unions. Credit unions with holdings of less than $20 million would be exempted, and Ralston said fewer than half of the 44 credit unions in B.C. are big enough to pay the tax.
The personal income tax rate on earnings above $150,000 a year would go from 14.7 per cent to 19 per cent under an NDP government.
The B.C. Liberal budget promised to raise it to 16.8 per cent for two years only.
Ralston said the NDP plan would add $1,100 to the tax bill of someone making taxable income of $200,000 a year, and he considers the increase to be a permanent measure.
Finance Minister Mike de Jong said the NDP plan echoes the policies pursued by the NDP government of the 1990s.
“Taxation levels went up, a corporate capital tax was introduced, and investment and jobs fled,” de Jong said.
The NDP carbon tax increase is to be phased in on “venting” emissions from oil and gas production, raising an estimated $35 million next year and tripling over the next two years.
Ralston said the NDP will not extend the carbon tax to chemical process emissions on cement plants, aluminum smelters and other industries that emit carbon dioxide beyond their use of fossil fuel.
All the new revenues would be spent on programs, including reinstating non-repayable grants for post-secondary students.
NDP social development critic Carole James said more details of the party’s spending plans will be revealed next week.