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BC Budget: Boring good, boring bad
Cowichan BC Liberal president Steve Housser's a fan of the Liberal government's three B's.
"I like the three B's, balanced boring budget," Housser said Wednesday, after Finance Minister Mike de Jong unveiled B.C.'s second straight surplus budget Tuesday.
"I don't know that it has to be filled with fireworks. They're doing what they said they would do."
He was particularly pleased with the framework for the LNG pipeline and remains "hopeful that it's going to produce lots of extra room for movement."
On the other hand, Cowichan's official opposition representative, NDP MLA Bill Routley, says the 2014 books are nothing but boring.
"This Liberal budget puts B.C. families last," Routley said Thursday. "This is a budget that forces families to pay more and get less. It makes life for British Columbians less affordable due to what I would call hidden tax hikes to ordinary families and these added costs will hit hard seniors and those who can least afford service increases."
Routley listed increases to BC Hydro rates, MSP, and ICBC.
An NDP power point presentation highlighted broken promises, including no mention of Violence-Free B.C., or the 10-Year Transportation Plan, as well as no new resources for the 10-Year Skills Training Plan. Routley stands behind that official response.
“They’ve put all of their eggs in the LNG basket, and they’re even messing that up," said New Democrat finance critic Mike Farnworth. "They failed to meet their own timeline on delivering a taxation framework, their promise to have a plant up and running by 2015 is broken, and their fantasy prosperity fund is nowhere to be seen.”
The biggest tax change is that provincial tobacco tax goes up 32 cents a pack April 1, on top of the latest federal increase of 40 cents a pack. B.C.'s share is expected to generate another $50 million, and de Jong said a "significant portion" of that will be used to develop smoking prevention efforts in partnership with the Canadian Cancer Society.
Provincial funding for K-12 education continues at 2013 levels, as the government pursues an appeal of a court decision that could add hundreds of millions to school district costs. The budget includes a $300 million contingency fund this year, rising to $400 million next year, to cover anticipated costs in labour and other areas such as forest fires.
The budget touts investments in trade skills training, with shop projects at Camosun College, Okanagan College and NorKam Secondary in Kamloops. But the largest capital project is a new campus for Emily Carr College of Art and Design in Vancouver, and operating spending on colleges and institutes is projected to fall by $5 million in the coming year.
De Jong said the "re-engineering" of B.C.'s skills training programs referred to in last week's throne speech is getting underway, and a new $1,200 education savings grant for children born in 2007 or later is being delivered starting this year.
The government expects to end the current year with an operating surplus of $175 million, rising to $184 million next year, which de Jong said is mainly a result of spending discipline. B.C. and Saskatchewan are the only provinces to balance budgets this year, and the three western provinces remain the only ones with a triple-A credit rating.
B.C.'s personal income tax rates remain the lowest of any province, but the budget announced another four per cent increase in Medical Services Plan premiums for next year. That makes increases totalling more than 30 per cent over the past five years.
Taxpayer-supported debt rises to more than $43 billion in the coming fiscal year, climbing to $45.5 billion by 2016-17. About $11 billion of next year's burden is operating debt left by a string of deficits in recent years.
Total provincial debt, including self-supported debt held by BC Hydro and other agencies, grows from $64.7 billion this year to $68.9 billion three years from now.
B.C. pays $2.5 billion a year to service debt, or four cents out of each revenue dollar.
To generate the resource wealth Premier Christy Clark has promised will pay off B.C.'s debt, the budget describes a two-tier income tax on liquefied natural gas exports 1.5 per cent and up to seven per cent.
LNG production companies would pay the lower rate to start, with most or all of it repaid by an investment tax credit until their capital costs have been recovered. Rates are to be confirmed with legislation in the fall.
No revenues from LNG are expected until 2017, and in the first three years, producers would recover income tax through a credit that continues until their capital investment is paid off.
— with files from Tom Fletcher