Balanced B.C. budget features higher user fees, little tax relief

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Tax relief is on the way this year for some of B.C.'s poorest families, but the provincial budget unveiled on Tuesday offers no new benefits to offset an array of government fee increases that most middle-class British Columbians will face.

Finance Minister Mike de Jong's budget speech stressed what he called a disciplined approach that has placed B.C. in an elite club: "Alone among the provinces, B.C. will likely be the only jurisdiction to table a balanced budget for 2015," he told the legislature.

Even against stable economic-growth forecasts, however, Mr. de Jong said Tuesday that his $46.5-billion budget, with a forecast surplus of $284-million, offers little room for new program spending.

The B.C. Liberal government earned applause from the business community for fiscal restraint and conservative forecasting. Those factors, along with some lucky breaks on exchange rates and a rebounding U.S. economy, have helped deliver a third consecutive balanced budget. "British Columbians have scored a fiscal hat trick," Mr. de Jong said, using one of many hockey analogies during his speech.

The budget also shows that the B.C. economy is in the midst of a dramatic shift. Natural-resource revenue that 10 years ago delivered more than 12 per cent of government income will this year produce less than 6 per cent. Mr. de Jong credited a diversified economy for offsetting those losses.

Mr. de Jong's cautious approach to forecasting was displayed in the latest update for the current fiscal year: What was supposed to be a "razor-thin" surplus of just $184-million is now expected to approach $1-billion by the end of March.

That money will be used to pay down the province's growing debt, but critics say the B.C. Liberal government is chronically underfunding health care, education and support for families.

"The middle class was left behind," said NDP Leader John Horgan. "The government clearly has an agenda, to pander to those who support them and leave the rest of British Columbians to fend for themselves."

However, Mr. de Jong maintained that middle-class families already enjoy some of the lowest tax rates in the country, and with an early-childhood tax credit, promised two years ago but just coming into force this year, some may even come out ahead.

As expected, the government did eliminate its policy to claw back child-support payments to single parents on income assistance, a measure that is expected to return roughly $13-million to the pockets of some of the province's most needy families this year. And, as promised, the surcharge on high-income earners, imposed in the 2013 budget, will be lifted on Jan. 1, 2016, a $51-million reduction in revenues. In a full fiscal year, the province will give up more than $200-million in tax room for high-income earners.

"What's wrong with this budget is it gives more money to the top 2 per cent and no money to the hundreds of thousands of people who work at minimum wage or just slightly above – those people are working full time and living in poverty," said Irene Lanzinger, president of the B.C. Federation of Labour.

But Jock Finlayson of the Business Council of B.C. said the government's management on the spending side has helped put the province on good footing, and applauded the cautious assumptions about revenues. He added that the budget demonstrates the benefit of a diverse economy that has protected the province from some of the wild swings of the past. "B.C. is not a boom/bust economy that people remember."

The budget included a series of measures that target the province's most vulnerable: There is more money for Community Living B.C. and income assistance, and a low-income tax credit has been expanded. But for the majority of middle-income earners, there is only one new tax change available – families who already claim a child fitness credit can claim sports equipment, a measure that will be worth about $12 a child each year.

Meanwhile, revenue growth is expected to average 3.4 per cent each year for fees and licences – mostly due to increases to Medical Services Plan premium rates and higher postsecondary fees. As well, Crown-owned BC Ferries, BC Hydro and ICBC are forecast to raise rates.