What you think of the new BC budget depends on where you stand

Pleased with their new budget, the BC Liberals say it will help families but their political foes beg to differ.

Finance Minister Michael de Jong unveiled a budget Tuesday he says will deliver an improved deficit forecast of $1.2 billion in 2012 -13. Beginning in 2013 -14, continued spending discipline, targeted tax increases, net economic growth, and the successful sale of surplus government properties and assets combine to eliminate the deficit and deliver progressively larger forecast surpluses all three years of the fiscal plan:

  • $197 million in 2013 -14.
  • $211 million in 2014 -15.
  • $460 million in 2015 -16.

“The finance minister keeps telling us that this budget is balanced, but the people of British Columbia no longer believe the BC Liberals when it comes to financial matters,” Columbia River-Revelstoke MLA Norm Macdonald said Wednesday.

The projected deficit for this fiscal year, ending March 31, 2013, is $1.2 billion so it is unlikely that the finances for budget year 2013/14 would be so drastically different.

“The government has ‘balanced’ the budget by cutting and curtailing spending in critical areas such as education, healthcare and forestry, but they have also claimed significant revenue from future sales of public assets.

“And in talking about this budget, the government is choosing not to discuss the long-term contractual obligations we owe, in the amount of $96 billion.  Energy Purchase Agreements for private power production make up $59 billion of these obligations.  While it doesn’t show as debt, the consequences on future budgets are just the same.”

However, Dejong says the budget includes new measures to benefit B.C. families and help make family life more affordable, including:

• The B.C. Training and Education Savings Grant, a one-time $1,200 grant toward a B.C. resident child’s Registered Education Savings Plan after the child turns six years old. Payments are made from the Children’s Education Fund, established in 2007.

• A new B.C. Early Childhood Tax Benefit will provide $146 million to approximately 180,000 families with children under six years old, effective April 1, 2015. Families with young children can receive up to $55 per child, per month. Most will receive the full amount, while those with family incomes between $100,000 and $150,000 a year will receive a partial benefit. About 90 per cent of B.C. families with young children are expected to be eligible.

• B.C.’s new Early Years Strategy will invest $76 million over three years to support the creation of new child care spaces and improve the quality of child care and early years services. Included within this, $32 million will support the creation of new child care spaces and $37 million will improve the quality of services available. Savings of close to $1.1 billion have been identified in ministries and Crown agencies over the three years of the fiscal plan. Budget 2013 puts about half of these savings toward achieving the balanced budget, and about half ($497 million) to investments in families, jobs and economic growth. These measures include:

• $60 million in new and reallocated funding to continue the Sports and Arts Legacy Fund first introduced in Budget 2010.

• An additional $52 million over three years for increased RCMP policing costs to maintain existing front-line services, including officers hired to combat organized crime and gang activity.

• An additional $18 million for the recently announced B.C. Creative Futures, to fund programming aimed at increasing youth participation in the arts.

• An additional $12 million over three years to complete funding for the medical expansion program, fulfilling a commitment from 2001.

• $20 million to provide carbon tax relief for commercial greenhouse vegetable and flower growers. In addition, government intends to provide a carbon tax exemption for farmers for the same coloured motor fuels, and uses, they are currently able to purchase exempt from motor fuel tax.

The budget says spending on education will continue to rise over the three-year fiscal plan to nearly $5.4 billion. To support the continued transformation of education, the government will invest $210 million in the Learning Improvement Fund over three years. A new $1 million investment in the school fruit and vegetable nutritional program will further support student health and nutrition by adding local milk to the program.

The BC Teachers Federation was dismissive.

““We need a plan to start moving BC back up to the national average in terms of education funding,” Glen Hansman, the BCTF’s second vice-president said adding that BC is last on seven key measures, according to Statistics Canada:

  • BC has the lowest per-student funding in Canada—almost $1,000 per student below the national average.
  • BC has the worst student-educator ratio in Canada. This means there are more students per teacher than anywhere else in the country.
  • While public school enrolment declined across Canada, only BC cut teaching positions. All other provinces hired more teachers and invested more in public education.

Since last spring the Clark government has been touting its Learning Improvement Fund (LIF), which is supposed to provide additional services to students with special needs. The budget document, which is essentially a re-announcement of the LIF, states that the fund has been used to hire 500 more teachers, but the BCTF has seen no corresponding increase in the teaching force.

“The fund is no substitute for the guaranteed support levels that were taken away by unconstitutional legislation in 2002, when Christy Clark was Minister of Education,” Hansman said. “Children who began Kindergarten that year now have gone through their entire school careers in larger classes, with less support for special needs, and with fewer counsellors, librarians, and other specialist teachers to help them along the way. Despite all the government hype about education reform, there is no money in the budget for any new initiatives, such as much-needed enhancements to Aboriginal education, or trades and technology in schools.”

To help achieve the balanced budget, government is making some targeted tax changes, including:

• Increasing the general corporate income tax rate to 11 per cent from the current 10 per cent, effective April 1, 2013. Despite the increase, the general corporate income tax rate will still be 33 per cent lower than in 2001, and B.C. will continue to have among the lowest corporate income tax rates in Canada.

• A two-year increase in the personal income tax rate for individuals earning more than $150,000. Rates will increase by 2.1 percentage points to 16.8 per cent, starting January 1, 2014. B.C. continues to have the lowest provincial personal income taxes in Canada up to $122,000 a year.

• Increasing taxes on tobacco by $2 a carton, effective October 1, 2013.

• Phasing out school property tax credits for light industry (class five) for the 2013 tax year.

Click here to read the government’s budget package.