B.C. finance minister promises turnaround
B.C. Finance Minister Colin Hansen says his government wants to capitalize on the momentum of the 2010 Winter Olympics to pull B.C. out of the global economic downturn.
Hansen laid out his economic blueprint for the province in the legislature in Victoria on Tuesday afternoon, highlighting his plans to increase B.C.’s business competitiveness, maintain social services, bring down the deficit and balance the budget by the 2013-14 fiscal year.
"We have come through an unprecedented global downturn. And, although it will take time, we are on our way to recovery," said Hansen.
Pointing to improving economic indicators in exports, housing, employment and consumer confidence, Hansen said B.C. is forecast to have one of the fastest growing GDPs of any province in Canada at 3.0 per cent next year, second only to Saskatchewan at 3.1 per cent.
"This is partly due to the incredible success so far of the 2010 Olympic and Paralympic Winter Games, which many hail as a turning point in B.C.’s history," said Hansen.
"There is no question that the thousands of people who came to our province in the past few weeks — and the billions who watched events unfold online or on TV — will play a key role in lifting our economy, both in the short-term and over time," he said.
But Hansen said many families in B.C. are still feeling the effects of the downturn, and he highlighted three key areas he intends to target for economic recovery: support for key social services, health care and education, a commitment to returning B.C. to a balanced budget by 2013-14 and stimulating the economy to create jobs in B.C.
Among the economic stimulus measures highlighted by Hansen was the $5.3 billion in infrastructure spending committed in B.C. since October 2008, a key job creation measure, which he estimated has led to the creation of 32,000 jobs.
Tax break for families
In his speech Hansen also reached out to young families in B.C. with a program to allow them to defer their property taxes for as long as they own their home, an option that was previously only available to seniors and those homeowners facing financial hardship.
To qualify for the program, homeowners must have 15 per cent of the equity already invested in their home, and any deferred taxes will be charged interest at the prime rate.
He also promised homeowners outside of the Lower Mainland and Capital Regional District up to a $200 benefit above the regular homeowner grant, but did not reveal the details of the program.
Hansen went on to defend his government’s spending on the high-profile education and health ministries, two areas for which his Liberals have come under frequent attack by the opposition NDP and other stakeholders.
"We have increased education funding every year since 2001, and with this budget the trend continues. In the coming school year, per-pupil funding will increase to $8,300. That is the highest ever in B.C.," he said.
Likewise, he pointed out that the Liberals have increased spending in health care once again, this coming year by nearly $450 million.
"In fact, in the last February’s budget, health care accounted for 95 per cent of all new spending," he said.
Hansen also tied health care spending to the unpopular HST, promising that all revenue from the new tax that is due to start on July 1, will be funneled directly into health-care spending.
To do that, the government will pass legislation to mandate that all revenue from the HST, plus revenue from medical service plan premiums, tobacco taxes, some lottery revenues and all health transfer payments from the federal government, to fund the health-care budget — a move critics quickly labelled as smoke and mirrors.
Hansen went on to defend the impending tax, saying it was "widely regarded as the single most important step government can take to strengthen our economy," and pointed out that lower-income taxpayers will receive a new HST credit cheque every three months to offset the tax, beginning in July.
A final focus of Hansen’s speech covered existing measures to stimulate the province's resource sector, including the oil, gas and mining industries.
Speaking to reporters in advance of the budget release, Hansen defended his budget deficit saying, "the debt we have set out in this fiscal plan is definitely manageable."
He also predicted B.C. would emerge from the global economic downturn as an economic leader.
"B.C. is going to come out of this dip stronger than any other jurisdiction in North America," he said.
Hansen also predicted there would be no unexpected costs associated with the 2010 Winter Games, and said that organizers were on track to bring the Games in on budget. And as part of a deal with the federal government, B.C. would not be on the hook for any extra security costs, he said.
But B.C. would not be rolling out any new tourism marketing programs in the wake of the Olympic Games, he said. Instead, the province would rely on existing programs to market the province to visitors.