B.C. budget: Tax hike for wealthy, more money for education, housing, overdose crisis
Lord Strathcona Elementary School in Vancouver. (Postmedia Network/Files)
VICTORIA — B.C.’s New Democrat government will hike taxes on the wealthy, corporations and polluters, while pumping more money into education, homelessness, rental housing and the overdose crisis, according to the new government’s first budget update.
Finance Minister Carole James said the budget follows through on some of the party’s priority issues, as a first step, before New Democrats can table a full budget in February 2018.
“I am a big believer that a budget does not stand alone, a budget is a tool to make sure the people of this province who built the economy benefit from the economy,” said James.
But the NDP also repurposed the previous Liberal government’s pre-election spending promises on the child welfare system ($147 million), creating 2,000 new child care spaces ($20 million) and opening more than 5,000 new spaces in Surrey schools, re-announcing the funds as if they were NDP proposals.
That meant the NDP, which campaigned vigorously on those issues, offered no new money on some of its most high-profile election promises.
The NDP had promised during the election to spend $175 million this year to begin implementing a $10-a-day child care system. But that money was nowhere to be found in its fiscal plan.
There was also no new money to accelerate transit upgrades in Metro Vancouver, for a promised $400 renter’s rebate, to create an empty home speculation tax, hire more conservation officers or eliminate student loan interest rates.
James said her party only had a few weeks to prepare the budget update, and did its best to hit major issues even if it resulted in the NDP failing to live up to specific election spending promises. The plan is still to get to $10-a-day child care in the future, she said.
“I’ll acknowledge we didn’t have the time to be able to implement all the commitments in the timeline laid out,” said James.
“This is definitely an area we were hoping to see a little bit more ambitious rollout for child care,” said Iglika Ivanova, of the Canadian Centre for Policy Alternatives. “I’m expecting to see more on this file in February.”
James said her government wants to take the time to make sure it can look at B.C.’s larger picture and put together additional plans this fall.
“I’ve said all along we’re not going to be able to do everything overnight,” said James.
The NDP’s 2017/18 “budget update” forecasts a $246 million surplus on more than $52 billion in spending for the fiscal year running between April 1, 2017 to March 31, 2018.
That compares to a $295 million surplus projected by the Liberals in their Feb. 21, 2017/18 budget.
The updated NDP numbers boosted spending overall by $1.67 billion, compared to the Liberals, while taking in $1.6 billion in additional new revenue.
The extra revenue is set to flow from a one per cent increase in the general corporate tax rate, to 12 per cent, generating $890 million, effective Jan. 1, 2018.
The NDP is also raising the personal income tax rate to 16.8 per cent from 14.7 per cent on taxable income over $150,000 in January — a surcharge on the wealthy the Liberals ended several years ago.
“We believe those at the top can pay a little bit more to be able to contribute to the services and programs for all British Columbians,” said James.
The carbon tax is also set to increase $5 per tonne in April 2018, though the NDP promised increased supports for low and middle income British Columbians to compensate. The carbon tax is no longer revenue neutral, the NDP announced, eliminating a Liberal requirement that any new money be offset by boutique tax credits.
The NDP budget added $137 million in extra education funding, to hire 3,500 new teachers, and fully fund positions the government was obligated to fill after the previous Liberal administration lost its long-running legal battle with the teachers’ union at the Supreme Court of Canada.
The additional education funding is on top of almost $200 million earlier announced by the Liberals this year for the teacher deal. The new government will also add $40 million to ease enrolment pressures this year.