B.C. government raising taxes for high earners and corporations to help pay for $51.9B balanced budget
50 per cent reduction to MSP payments; missing promises: $400 renter's rebate, freeze on ferry and hydro rates
B.C.'s new. government will spend $51.9 billion for this fiscal year to support the NDP'S stated goal of making the province more affordable for residents.
It's a balanced budget but nearly $2 billion more than the B.C. Liberals planned to spend in their February budget.
"It's a budget that puts people first," said B.C. Finance Minister Carole James who began her presentation from Victoria on Monday by talking about being raised by her grandparents, who were extremely careful with their money; every dollar was spent with purpose.
The plan rides a hot economy and relies on higher than expected surpluses to pay for policies and programs.
They include the construction of new affordable rental housing, modular housing for homeless people, a 50 per cent cut in MSP premiums and an increase of $100 per month for people on income and disability assistance.
It's spending James described as, "long overdue."
Carole James’ Budget 2017 update will spend a further $681M over three years for K to 12 education system.—@ChadPawson
There is also money for education, improved home and residential care, new funding for the Residential Tenancy Branch, the fentanyl crisis and wildfire suppression.
NDP 2017 budget, capital spending $14.6B over 3 years: more than $4B for education infrastructure, $3.1B health facilities, $500M on housing—@ChadPawson
The province will also reduce MSP premiums by 50 per cent, something the Liberals had promised to do. However the NDP says there will be no need to apply for the reduction.
NDP to reduce MSP by 50%, starting Jan. 2018 no need to apply. Savings = $450/year for ind. $900/year for families. Eliminated in 4 yrs.—@ChadPawson
Despite all the spending, missing from the budget is money to provide a $400 renters rebate, a freeze on B.C. ferry fares and BC Hydro rates, $10-a-day daycare, and a $1000 completion grant for university and college students — just some of several things that were prominent in the NDP's campaign platform.
"I'll acknowledge that we didn't have time to make all the commitments," she said referring to the 52 days it took for her government to take office after election night.
"You can't turn back the clock on 16 years overnight. I understand peoples' impatience."
She says work is being done to include these unmet priorities in the full budget in February but did not elaborate on where the money would come from to pay for them.
There is also no new money for the embattled Ministry of Children and Family Development, just the $312 million over three years the Liberals earmarked
"The message there is, it's a start," said James.
Higher earners and corporations will pay more tax to help pay for expenditures.
People earning more than $150,000 a year will now face a personal income tax rate of 16.8 per cent up from 14.7 per cent.
The NDP will also increase the general corporate income tax to 12 per cent up from 11 per cent.
"These are commitments that we made during the elections and commitments we have built into this budget," said James. "This is the top two per cent of income earners."
B.C. business reps say tax increase could keep talent out of B.C. applaud 0.5% reduction in small business tax rate, PST off electricity—@ChadPawson
The province will also increase the carbon tax rate — a tax used to reduce greenhouse gases in B.C. — by $5 per tonne of carbon dioxide equivalent emissions.
It will also eliminate the requirement for the carbon tax to be revenue neutral.
Kris Sims with Canadian Taxpayers Federation worried that revenue from carbon tax will not be spent transparently.—@ChadPawson
James says her government will use revenue generated from the changes to the carbon tax to help residents, families pay for green initiatives such as home retrofits or green transportation.
Aiding the NDP in its spending plans is an economy that is performing better that expected and higher than expected revenue.
The 2017/2018 budget is forecasting more than $300 million in property transfer tax, also nearly $900 million in corporate income tax.
"Over the three year fiscal plan period, revenues are forecast to be $4.6 billion higher than the February estimates," said documents provided by the Ministry of Finance.
Innovation Commissioner, Emerging Economy Task Force [Green initiative] and Fair Wages Commission will help develop new economic drivers.—@ChadPawson
James is predicting balanced budgets up to 2020.
She says for the first time since the 70s, there will be no operating debt by the 2019/2020 budget as a result of surpluses — including $2.8 billion from 2016/2017 alone.
While her government will spend $51.9 billion in this fiscal year, revenues are pegged at $52.4 billion.
James' ministry has also worked in contingency money to deal with unknown costs due to wildfires but also the softwood lumber dispute, the renegotiation of NAFTA, the tightening of Canadian monetary policy and rising interest rates.
However, in the Budget 2017 update the NDP said there was greater GDP growth during the 2016 fiscal year, than the Liberals had forecasted — 3.6 per cent as opposed to the Liberal forecast of three per cent.
For 2017/2018 fiscal year, the NDP is forecasting provincial GDP growth to be 2.9 per cent, as opposed to the Liberals' 2.1 per cent.