VICTORIA (NEWS 1130) – The Provincial NDP government is vowing to make life more affordable in BC, announcing a number of initiatives to achieve that goal in their 2018 budget. The financial plan is the first full budget for the minority NDP government since it came to power last summer.
Finance Minister Carole James delivered the budget, unveiling an increase and expansion of the Foreign Buyers Tax and the addition of a speculation tax on non-taxpaying absentee landlords with a goal of stabilizing sky-rocketing prices and closing loopholes and cracking down on tax fraud.
Foreign buyers tax is being increased to 20%, and being extended Victoria, Nanaimo, Fraser Valley, Central Okanagan on top of Metro Vancouver (where the tax already exists)
— NEWS 1130 (@NEWS1130) February 20, 2018
James says the tax measures are part of the government’s aim to improve housing affordability in markets where some seniors are forced to live in their vehicles and young professionals are refusing to take jobs in BC because they can’t find a place to live.
“We live in a province rich in people, resources, natural beauty, and opportunities,” she says. “Yet those opportunities have become further and further out of reach for many.”
The foreign buyers tax jumps from 15 to 20 per cent tomorrow and will be expanded beyond Metro Vancouver to include much of southern Vancouver Island, the central Okanagan and the Fraser Valley.
“Increasing the tax may deter those who are speculating in BC’s housing market and it will definitely penalize those who do.”
“We are taking bold action to change that with Budget 2018 – a budget that works for everyone in BC.” – Minister of Finance @carolejames #bcpoli #budget2018 #bcbudget2018
Find out more ➡➡ https://t.co/jHWKYeeBQu pic.twitter.com/eoNPVgUXOY
— BC NDP (@bcndp) February 20, 2018
The speculation tax will come into effect later this year for in Metro Vancouver, the Fraser Valley, the Victoria-area, Nanaimo Regional District, Kelowna and West Kelowna.
“BC’s real estate market should not be used as a stock market,” she says. “We will introduce a new annual speculation tax starting in BC’s urban areas. It’s going to tax foreign and domestic speculators. This tax will apply to property owners who don’t pay income tax here, including those who leave their units vacant.”
On top of an addition of taxes, there is a promise to build 114,000 new housing units over a decade for some families, seniors, and students. Renters will also see a $930 per year increase to the rental income assistance program.
James says $400 renter rebate promised before last year’s election is still in the works, but she admits it’s not happening this year.
The province is investing more than $1 billion in child care, making care effectively free for some low-income families who use licensed child care, while others will have subsidies based on income. The investment will create more than 22,000 day care spaces and offer monthly benefits of $1,250 to 86,000 families.
— NEWS 1130 (@NEWS1130) February 20, 2018
No mention at all of the 10-dollar-a-day daycare the NDP campaigned hard on but it has since extended its own timeline for that goal.
The Pattullo Bridge will be redone at the Province’s expense, but there’s no mention of money for other Lower Mainland transportation projects like the Massey Tunnel, Broadway subway, or Surrey light rail.
We already know the government plans to phase out MSP premiums by 2020, but now it’s says it plans to fund the shortfall with a new employer health tax on some businesses. Only businesses with payrolls over $500,000 will be impacted by the tax, businesses with smaller payrolls will be exempt from the tax.
There’s a break for those who rely on BC Ferries; fares will be frozen for the three main routes. Small routes will have a 15 per cent fare reduction. The budget skips any mention of new money for Lower Mainland transportation projects.
Other budget bits:
Steep hike in taxes for expensive vehicles as of April 1st. Vehicles worth more than $150,000 will be taxed at 20 per cent, while vehicles valued at between $125,000 and $150,000 will be taxed at 15 per cent.
— NEWS 1130 (@NEWS1130) February 21, 2018
Other budget bits
– Steep hike in taxes for tobacco and expensive vehicles as of April 1st. Vehicles worth more than $150,000 will be taxed at 20 per cent, while vehicles valued at between $125,000 and $150,000 will be taxed at 15 per cent.
– $50 million for the preservation and revitalization of Indigenous languages in the province.
– $450 million to a new student housing program that will allow public post-secondary institutions to borrow from government to finance student housing projects. Previously this was not allowed in BC.
– Capital spending totals $26.2 billion over three years for schools, hydro-electric projects, roads, bridges, hospitals, etc.
– Revenue from legalized marijuana expected to add $50 million per year.
– The carbon tax is increasing $5 per tonne per year, adding $212 million a year, as was announced last year.
– Total provincial debt is set to jump by $4.1 billion, the largest single-year jump since 2012/13.
– Increased hours of residential care for seniors and money to help residents find a family doctor.
– $72 million set aside for wildfire recovery and resiliency activities.
– $105 million over three years to cover the cost of prescription drugs for lower-income people.
– $18 million over three years to help woman and children who have been victims of domestic violence and sexual assault (councelling, outreach, crisis support).
– $6 million funding boost for Aboriginal Friendship Centres.
.@carolejames says $400 renter rebate promised before last year's election is still in the works, but she admits it's not happening this year. Finance Minister also defending new plan to make employers pay #MSP saying that doesn't apply to most small business owners. #bcpoli
— Marcella Bernardo (@Bernardo1130) February 21, 2018
Thumbs up or thumbs down?
Liberal Critic Shirley Bond points out the payroll tax takes effect in 2019.
“This new payroll tax kicks in a year before the MSP premiums are phased out, generating a tax windfall for the government.”
She also says the province’s promises in the budget are bigger than it’s wallet.
Faith Bodnar with Inclusion BC is not happy with the budget and was hoping for something more.
“We’re a little disappointed, though, because the focus on affordable housing didn’t include people with intellectual disabilities and people on PWD benefits. We were looking for some signal that that was important, but it wasn’t in the budget,” says Bodnar. “The affordable housing gap for people on PWD benefits has not been addressed at all in today’s budget.”
She says more can be done after hearing rental subsidies are not going up for more than 100,000 British Columbians.
“Who receive right now, 375 dollars a month. We’re talking, as you know, about the most vulnerable people in our province. We were disappointed. At the very least, indexing those benefits to the cost of living would have been important.”
Jordan Bateman with the Independent Contractors and Businesses Association is worried that could hurt the construction industry.
“When you look at the 30-point housing plan they put out, it’s a lot of government building housing, it’s a lot of taxation of various groups, and not a lot of reducing red tape at city halls.”
The 30-point housing plan has also upset Cameron Muir with the BC Real Estate Association. He’s worried about the speculation tax hurting out-of-province owners of vacation homes.
“That’s a really big tax increase for Canadians who have done nothing wrong but own vacation property in one of Canada’s most amenable climates.”
Meantime, managing director of the BC Non-Profit Housing Association Jill Atkey says overall, she’s thrilled, explaining commitments to do with supportive housing focus on people without a roof–all the way to the middle-income earner whose needs are no longer met by the market.
“There’s a real need for the community housing sector to be the solution for those individuals and the investments made in this budget will help us do that.”
She adds housing is one of the problems that is very hard to reverse once it’s reached a crisis level, as has happened in the Vancouver area. She says if the commitment is followed through on over the next decade, there will be a significant positive impact.
“We are very happy with the investments in housing and child care. Those investments are going to make life better, certainly for our members who struggle to find affordable housing and who are certainly struggling to raise their families with a lack of access to affordable child care,” says Jennifer Whiteside with Hospital Employee’s Union.
“Really, the best news for us, was in the lift to the health budget. There’s $1.5 billion of new spending in health and a significant portion in that is going to address the crisis in staffing in our care homes. We will, based on this budget, be able to start to make real progress in closing the gap between the staffing levels that currently exist in our care homes.
According to a report released earlier this month, 85 per cent of BC care homes fail to meet the staffing guidelines from the Ministry of Health.
UBC professor Paul Kershaw says those measures should lessen the financial burden on young British Columbians.
“I think younger people can celebrate that we’re on track to no longer commit child care to be another long-term mortgage-sized payment,” he says. “We seem to be a province that says we are going to take more and more tools available to us to ensure that home prices no longer continue to sky rocket so that we create for our earning to slowly but, I hope, surely catch up.”
Ian Bruce with the David Suzuki Foundation says the budget is impressive for taking action on climate change, with the carbon tax increase and transit investments.
“This will go a long way to helping not only reduce carbon emissions in the province but also reduce traffic congestion and gridlock which has been a major, major issue, for certainly the region and metro Vancouver,” he says.
The group is however dissapointed the government didn’t add the oil and gas sectot to the carbon tax, as a portion of their emissions are exempt.
“Given the fact that businesses and households have the incentive from the carbon tax to invest in cleaner technologies and greener options the same should apply certainly for the oil and gas sector.”