VICTORIA (NEWS 1130) – If you were hoping for a drastic change in spending in B.C.’s 2020 budget, the plan may not be all you had hoped for.
As was hinted at during a pre-budget announcement on Monday, the New Democrats’ fiscal plan for the upcoming year is one that is moderate and draws upon what the finance minister has called successes of budgets past.
The party has already touted this year’s budget as one that will focus on making life affordable for British Columbians, and one that promises to be balanced.
They are not that big, but there are surpluses in the three years ahead, with hundreds of million of dollars in contingencies to, as B.C. Finance Minister Carole James said, weather any unexpected storms ahead.
“The changes we have made are all about making lives better today and creating opportunities that last a lifetime — opportunities to put down roots, contribute to your community, and have a job that provides a good quality of life,” James said on Tuesday.
With just more than a month left in the current 2019/2020 fiscal year, the province has forecast a “modest surplus” of $203 million.
When it comes to economic growth expectations in the private sector, James noted B.C. topped all provinces in the country, adding some forecasters have said the economy is resilient, but warned of possible downward shifts to come.
Dousing the flames on ICBC’s dumpster fire
The provincial government has been under pressure to ease what has notoriously become known as the dumpster fire that is ICBC.
As was announced last month, the province is bringing in what resembles a no-fault insurance model. As part of the B.C. government’s plan, moving away from lawyers and legal costs will not only supposedly save British Columbians money, but will also put more cash into care for those hurt in a crash. New benefits have also been announced for those most seriously hurt in a crash.
“Our government has taken significant steps to help address sustainability at ICBC and affordability for British Columbians,” James said. “While the old government ignored the problems with auto insurance, we are transforming ICBC to make it work for you.”
There will be no basic rate increase in 2020, James said, and the average savings per driver are anticipated to be about 20 per cent, or $400, starting in May of 2021.
More information on the shift to the new model is expected once legislation passes, however, staff said as your premiums go down, the province’s bottom line won’t see any more losses, with gains actually anticipated over the next three years.
“The enhanced care model is really focused on making sure that we provide better care for people who have been in accidents, and that we ensure that people are able to see a drop in their insurance rates,” she said, adding this is hopefully the last year before we see balance at the auto insurer.
Childcare and help for families in B.C.
As announced in 2018, the B.C. Child Opportunity benefit will be brought in this year, on Oct. 1. The benefit differs from a previous one in that children who qualify will now be able to receive the benefit until they are 18 years old, as opposed to just six.
In the 2020 budget, there’s no mention of implementing $10 a day childcare — which was a major campaign platform of the B.C. NDP — across the province as a standard, however, staff said the families of about 28,000 children have benefit from rates of $10 or less a day for childcare over the last few years. Of that number, only 6,000 spots were slated as part of the provincial government’s pilot project for $10 a day childcare — the rest of that figure is due to subsidies and grants, as part of the B.C. Child Opportunity Benefit, which more than 60,000 children benefit from.
As part of the province’s efforts to help families, James said the province will ensure there is more access to “quality care” for children, as well as lower fees.
James added the province has also committed to help improve access to housing, with more funding to help support initiatives to get people off the streets, too.
On real estate, while housing starts are down, but James said, historically, reality far exceeds what is estimated in the budget.
Even with that and prices still increasing, James said she’s seeing cautiously optimistic signals that point to an improved situation for British Columbians. She was, however, clear that affordability hasn’t been reached.
As part of the plan for 2020, the finance minister announced measures for “meaningful reconciliation,” but it appears there’s little new funding in this year’s budget.
James said the 2020 budget meets the commitment made to share gaming revenue with First Nations, announced in Budget 2019, to “fund local priorities.”
The only apparent new item on the reconciliation file appears to be some money to “create an Indigenous justice strategy,” as well as “support cultural inclusion for Indigenous children and youth in care.”
Last fall, the B.C. legislature passed the Declaration on the Rights of Indigenous Peoples Act, which was developed in collaboration with the First nations Leadership Council.
That act requires the provincial government to , among other things, “take all measures necessary to bring provincial laws into alignment with the UN Declaration.” Work, the province said, is ongoing on this file.
The budget announcement came amid ongoing demonstrations and blockades across the country related to a natural gas pipeline in north central B.C. that some Wet’suwet’en hereditary leaders have said didn’t receive consent.
James acknowledged the rocky road to reconciliation, asking people to stay committed to the process.
“And that includes $8 million for new Indigenous Justice Centres, and $15 million to support the cultural connection program,” she said.
On Tuesday, crowds gathered to rally outside the legislature in Victoria, with many people protesting in support of Indigenous right and in opposition to the Coastal GasLink pipeline.
Help for the struggling forestry sector
Big help for those in the forestry sector have been announced, with the B.C. NDP promising more funding to help current workers and those of the future.
“I want to recognize that, right now, the people who depend on B.C.’s forest industry are hurting,” she said, as a large group of forestry workers gathered just outside, along with pipeline protesters, in frustration of hard times. “A thriving forest sector has provided good, stable jobs for many families going back generations. However, over the last number of years, the mountain pine beetle infestation, wildfires and the softwood lumber dispute have reduced timber supply and triggered a wave of mills to close their doors or scale back shifts.”
It was just earlier this month that a deal was ratified with forestry workers, ending a months-long strike, which began last summer.
“The strike is over, and that’s a big plus,” James said at the budget announcement.
The budget allocates $13 million in new funding for things like economic development support and the revitalization of the forestry sector. This is on top of about $74 million already announced for workers, training, and support.
In addition to help for those working in the industry, the province has also set aside an additional $195 million for fire and emergency management to support wildfire and natural disaster response.
Both forestry and mining revenue are forecast to drop over the next few years.
Healthcare in B.C. is getting a financial bump in the years ahead, with the province promising $570 million in funding to help pay wage increases under new contracts.
The overall sum of $1 billion over the next three years is aimed at improving the quality of health care in B.C., as well as respond to population growth.
“We know there is nothing more important than being able to access high-quality health care when you or your loved one needs it most,” James said. ” As B.C.’s population grows and ages, we need to make sure we are ready to meet the demand.”
The money will also help bring down surgical wait times, James said, and a portion of the $1 billion is expected to be allocated based on need.
“Budget 2020 delivers better care for you and your family by building on the steps we have already taken to transform B.C.’s health care system,” she added.
Infrastructure upgrades, new facilities, and boosts in services for long-term care and seniors are also part of the plan announced.
Of course, the NDP scrapped Medical Services Plan premiums at the beginning of this year, which has also been touted in the 2020 budget.
Meanwhile, pop lovers in B.C. will notice an additional cost on their sodas starting this July. The province is eliminating a qualification that has allowed carbonated beverages to fall under the exemption for food products. This means provincial sales tax (PST) will also apply to these products sold in a container, as well as these drinks dispensed through a soda fountain, soda gun, or similar equipment. The tax will apply to sodas that contain sugar and/or artificial or natural sweeteners.
“This is a health initiative to look at how we grow healthy young people,” James said, adding this change is in line with recommendations previously made.
“We feel this is taking a step in making sure we’re addressing the biggest risk when it comes to [sweetened] beverages,” she said.
In other health-related changes, starting in April of 2020, the province will introduce what’s being described as a “default tax” of 29.5 cents to “heated tobacco products.” These products, which are separate from vaping products or cigarettes, are described as products that contain tobacco and are designed to be heated, but not combusted. They use a heating unit to produce vapour that is then inhaled. These products are relatively “obscure”, staff said, but this measure is being brought in to align regulations on all tobacco products.
Bad news for top earners
Changes are not going to be welcomed by some of B.C.’s top earners.
As of Jan. 1, 2020, a new personal income tax bracket was introduced, meaning people making more than $220,000 a year would be subjected to a tax rate of 20.5 per cent, up from 16.8 per cent.
“On the top one per cent of tax filers, asking those at the top, who benefit the most from our economy, to contribute a little bit more,” James explained. “Nearly half of the revenue will come from people making more than $1 million annually.”
The revenue will help fund infrastructure improvements as well as services, James said, in turn creating more jobs. The move would “keep B.C.’s economy moving, while maintaining B.C.’s tax system as one of the most competitive in the country,” she added.
Justice and safety
James announced on Tuesday funding was being set aside to fund the public inquiry into money laundering in B.C., something that has long been an issue that has had far-reaching consequences on various sectors like housing.
“Budget 2020 provides $11 million over two years to fund the public inquiry,” James said. Meanwhile, $71 million is being put up to “enhance public safety and support services.” That includes funding to help support families and individuals impacted by crime, more money for correctional service safety, cash for “public health and safety in cannabis implementation and compliance,” as well as millions of dollars for public safety measures in First Nations communities.
Read the full budget here:BC 2020_budget_and_fiscal_plan