British Columbia’s new government is forecasting a $246 million budget surplus in 2017-18 and similar surpluses for the next two years.
Finance Minister Carole James tabled her first budget update Monday afternoon.
“Less than eight weeks after forming government, we have taken the first steps to invest in the people of B.C. with this budget update,” she said in a press release. “We’ve made some immediate investments while we work toward our first full budget in February. In Budget 2017 Update, you’ll see our choices to build a better B.C. for everyone. We’re putting people first by improving the services they need and making their lives more affordable while supporting a strong, sustainable economy that provides good jobs throughout our province.”
Total government revenue is forecast at $52.4 billion in 2017-18, $52.6 billion in 2018-19, and $53.7 billion 2019-20.
Total expense outlook over the three-year plan is forecast at $51.9 billion in 2017-18, $52 billion in 2018-19, and $53.1 billion in 2019-20.
Government’s forecast for B.C. real GDP growth in 2017 is now 2.9 per cent, compared to the 2.1 per cent projected in Budget 2017. The outlook for B.C.’s economy for 2018 and beyond is relatively unchanged from the previous outlook, with real GDP growth of 2.1 per cent in 2018 and 2.0 per cent annually from 2019 to 2021, as the balance of risks to the domestic and global economy remains largely unchanged.
Downside risks to B.C.’s economic outlook include uncertainty regarding the United States’ fiscal and trade policy; potential for a slowdown in domestic and Canadian economic activity; faltering of Europe’s economic recovery as it faces the challenges of the United Kingdom exiting the European Union and elevated sovereign debt; slower economic activity in Asia, particularly as China transitions to a consumer-driven economy, resulting in weaker demand for B.C.’s exports; potential for monetary policy tightening to dampen economic momentum; and exchange rate and commodity price uncertainty, according to the government.
Provisions in the budget update include:
- $208 million for the construction of over 1,700 new units of affordable rental housing;
- $291 million to support the construction of 2,000 modular housing units for people who are homeless and more than $170 million over three years to provide 24/7 staffing and support services;
- A 50% cut in Medical Services Plan premiums for all British Columbians as a first step toward the elimination of the premiums over the next four years;
- $472 million to provide an increase of $100 per month for both income and disability assistance;
- The elimination of tolls on the Port Mann and Golden Ears bridges effective Sept. 1, 2017, a move that will save individuals as much as $1,500 per year and commercial truck drivers $4,500 a year.
- A $681-million increase for B.C.’s kindergarten-to-Grade 12 education system over three years, including $521 million to improve classroom supports for children for up to 3,500 new teaching positions, $160 million for enrolment growth and other pressures, along with $50 million in capital funding to provide the resources needed to help all children succeed;
- $322 million to provide an immediate and evidence-based response to the fentanyl emergency with prevention, early intervention, treatment and recovery efforts, improved data collection and analysis, along with a new Ministry of Mental Health and Addictions, and increased law enforcement to disrupt the supply chain;
- A new investment of $189 million over three years through a federal-B.C. agreement that helps seniors with improved home and residential care;
- $15 million over three years for the Healthy Kids Program, which provides hearing assistance benefits and improved rates for dental services;
- The restoration of the UBC Therapeutics Initiative providing funding of $2 million annually for the program, benefiting citizens with evidence based information on proposed prescription drugs, while saving health-care system costs; and
- $7 million over three years in new funding for the Residential Tenancy Branch to ensure renters are treated fairly in this province and that the rights and responsibilities of both renters and landlords are clearly understood.
- Helping evacuees, communities and businesses impacted by wildfires with $100 million in supports through the Red Cross, along with $140 million in forest projects focused on wildfire risk reduction, reforestation, wildlife habitat restoration, and raising awareness of the FireSmart program;
- $19 million for the restoration of free adult basic education and English language learning in both the K-12 and post-secondary sectors;
- The establishment of an innovation commissioner, emerging economy task force and the fair wages commission;
- A $200-a-month increase to the earnings exemption for income and disability assistance recipients to help people connect to employment;
- Restoration of the tax benefit for credit unions;
- A reduction in the small business corporate income tax rate from 2.5 per cent to two per cent; and
- Phasing out the provincial sales tax on electricity to help support industry competitiveness and job growth.
Tax rates will also be changing for British Columbians. The province will be:
- Introducing a personal income tax rate of 16.8 per cent on taxable income over $150,000, up from 14.7 per cent; and
- Increasing the general corporate income tax rate to 12 per cent up from 11 per cent.
The province will act to reduce carbon emissions by increasing the carbon tax rate on April 1, 2018, by $5 per tonne of CO2 equivalent emissions, while increasing the climate action tax credit to support low and middle-income families.
The requirement for the carbon tax to be revenue-neutral is eliminated so carbon tax revenues can support families and fund green initiatives that help address the Province’s climate-action commitments.