Province scraps MSP hike amid surplus
Finance Minister Mike de Jong provides an update on the 2016 budget Thursday. BC Government Photo
With higher-than-anticipated revenues lining provincial coffers, Finance Minister Mike de Jong said the planned increase to Medical Services Plan premiums in 2017 has been cancelled.
Bolstered by a significant jump in Property Transfer Tax revenue — due to the red-hot Metro Vancouver housing market — the province is now projecting a $1.9-billion surplus, according to the first-quarter report following the 2016 budget release.
PTT revenue accounts for approximately half of that projected surplus, up $965 million when factoring in the $165 million Victoria is expecting to rake in through the new, additional 15% tax that now applies to property purchases made by foreign buyers.
De Jong said that the majority of the additional PTT revenue — $500 million — will be put towards a housing affordability plan that will be introduced next week.
“With these revenues, we can make important investments to help families with the cost of housing,” said de Jong.
The finance minister is also expected to release data next week showing the impact of the foreign buyers’ tax for the first time since the measure was introduced.
A further $400 million will be directed to the B.C. Prosperity Fund.
The provincial government had budgeted for a 4% increase in MSP premiums to take effect as of Jan. 1, but rates will instead remain the same. Cancelling the hike means some adults will save as much as $36 annually on premiums. Meanwhile, B.C. residents who are eligible for premium assistance will see a 4% drop to their premium compared to what was originally budgeted.