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b.c. politics

B.C. Finance Minister Carole James, left, and Premier John Horgan in the legislature before the Speech from the Throne on Sept. 8, 2017.

The NDP government has been tempering expectations ahead of Monday's budget, describing it as a mid-year update rather than a full fiscal plan

British Columbia's Finance Minister, Carole James, will table the NDP's first provincial budget Monday, laying out the groundwork as the new government begins to implement its promises from the spring election.

Ms. James and others in the government have been tempering expectations, noting the budget is coming out halfway through the current fiscal year, meaning it will primarily be an update of a fiscal plan tabled, but never passed, by the former Liberal government this past February. The government will then present a full budget in the new year.

Related: Election promises and great expectations loom as B.C. NDP prepare to table a budget


Here's what you need to know about the budget, what it might contain, and the factors that will influence what the NDP can do.

Economic breathing room

The New Democrats have inherited an economy that is in much better shape than predicted even a few months ago.

The province's final public accounts showed B.C. ended the 2016-17 fiscal year with a $2.7-billion surplus – 10 times higher than what the former Liberal government projected in its initial budget for the year.

The higher surplus was due primarily to an increase in tax revenues, including personal income taxes. B.C.'s GDP grew by an estimated 3.7 per cent in 2016.

The surplus from the last fiscal year, which ended on March 31, doesn't help the government directly, since by law it must be applied to the provincial debt. But Ms. James has said the NDP government expects the recent economic performance to continue, giving the government more revenue at its disposal for Monday's budget and possibly in future years as well.

New priorities

The NDP government presented a Throne Speech last week that repeated many of the party's marquee promises from the provincial election campaign. A $10-per-day child-care system, a plan to eliminate MSP premiums, removing bridge tolls – most of the big-ticket items were there, at least in broad terms. But aside from tolls, which have already been eliminated from two Vancouver region bridges, there hasn't been much indication of how quickly some of those policies will be implemented or how the government will pay for them.

Ms. James says the budget will outline the "first steps" of some of those programs, but warned that the government is taking its time to ensure they are implemented correctly. Many of the finer details will need to wait until the full budget in February of next year.

Still, the government has announced several policies that will need to be accounted for sooner.

The most significant is the elimination of tolls on the Port Mann and Golden Ears bridges over the Fraser River. The government has said the change would cost $132-million in the current fiscal year and insisted the money would be there to pay for it. The government hasn't disclosed the exact cost for future years, nor has it said how the province will fund it.

Traffic heads westbound along the Port Mann Bridge connecting Surrey to Coquitlam.

The government has also increased income and social assistance rates by $100 a month. Ms. James has previously said the increase, which advocates had been seeking for years under the Liberal government, would cost $104-million this year, and $182-million a year after that.

While the government's plan for a $400 subsidy for renters wasn't directly mentioned in Friday's Throne Speech, Premier John Horgan suggested it would get a mention in the budget, though he didn't offer any specifics.

The budget also must take into account an ongoing hiring spree in the education system. A Supreme Court of Canada decision last year related to a labour dispute dating back to 2002 has meant the government needs to hire thousands of teachers. This year alone, school boards across the province hired 2,500 teachers.

The New Democrats also campaigned on increasing taxes for the province's wealthiest people, including generating $150-million in the current fiscal year, and $250-million next year, by restoring a tax bracket for people earning more than $150,000 a year. That top bracket was brought in as a temporary measure in the 2014 and 2015 tax years by the Liberal government but then eliminated for 2016. The party's campaign platform also promised to increase corporate income taxes to 12 per cent, from 11 per cent. The Throne Speech was vague about how quickly the government will move on such tax increases.

What could be missing

The New Democrats' signature promise during the campaign was a $10-per-day child-care system that will eventually cost as much as $1.5-billion a year, though it won't be fully up and running for a decade. In the meantime, the party said it would begin rolling out parts of it much sooner, focusing on younger children first.

The party's election platform said an NDP government would spend $175-million in the 2017-18 fiscal year, but it's not clear whether any programs will actually be in place that quickly. The Throne Speech only said the government would spend the fall consulting with families and child-care providers.

B.C. is the only province to charge citizens directly for health care through medical services premiums, which the New Democrats plan to eliminate. However, the government hasn't said when that will happen or how it would make up for the lost premiums.

The BC Liberal budget from this past February included money to cut those premiums in half as of Jan. 1, 2018; the New Democrats have promised to keep that cut in place while it figures out how to get rid of the premiums entirely.

When in Opposition, the New Democrats repeatedly called for a speculation tax to cool the province's housing market.

The NDP proposal differs from the BC Liberals' tax on foreign buyers, which added 15 per cent to the purchase of homes in the Vancouver region if the buyer was not a Canadian citizen or permanent resident.

Instead, the NDP proposed a 2-per-cent annual tax on the value of homes owned by people who do not otherwise pay taxes in B.C., beginning in the Vancouver region.

The Throne Speech did not mention how quickly the NDP will move on the speculation tax or whether it might be factored into Monday's budget. The new government has also not said whether it will keep or cancel the existing foreign buyers' tax. It's not clear whether either of those issues will be settled in the budget.


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