B.C. budget funds 3,500 teachers, homes for homeless; hikes taxes on rich

Then BC NDP Leader Carole James at a September 2008 Federal NDP party rally in Vancouver, Canada. (Photo by By mattjiggins – http://www.flickr.com/photos/mattjiggins/2897624842/, CC BY 2.0)

VICTORIA — British Columbia’s minority New Democrat government says it is starting to build the province all residents want, tabling a budget update that promises to hire 3,500 teachers and build thousands of rental units and homes for the homeless.

Finance Minister Carole James said Monday the government’s first budget document puts people first after 16 years of Liberal rule where families, students and seniors struggled.

The government forecasts a surplus of $246 million this year and economic growth of 2.9 per cent, up from the 2.1 per cent projected in last February’s budget.

The New Democrats formed a minority government last June after the May election did not produce a clear winner in the 87-seat legislature. The NDP, with 41 seats, and the Greens with three seats, combined their seat totals to oust the Liberals in a non-confidence vote.

“The budget really does invest in people to invest in B.C.,” James said in a briefing before introducing the budget in the legislature.

“I am a big believer that a budget does not stand alone,” she said. “A budget is a tool to make sure the people of this province who built our economy benefit from the economy.”

The updated budget confirmed many of the NDP’s spring election promises, but other major pledges appeared to be under review and considered works in progress.

B.C.’s carbon tax, currently at $30 a tonne, will increase by $5 per tonne on April 1, 2018, James said. The $5 annual increases ensures B.C.’s carbon tax reaches the federal goal of $50 a tonne a year before Ottawa’s 2022 deadline for a set carbon price agreement across Canada.

She also said the carbon tax will no longer be required to be revenue neutral and the expected $1.2 billion in revenues this year will fund government programs rather than tax measures.

“We will use carbon tax revenue to support families and fund green initiatives to address our climate action commitments,” said James.

Green Leader Andrew Weaver said he supports the increase and the move to drop revenue neutrality, saying the government could use the money to fund transportation initiatives.

James acknowledged the government’s plan for a universal, $10-a-day child-care program and its promised $400 subsidy for renters are currently in planning stages and may be more fully addressed in the government’s budget this February.

“We will implement programs and services as we are able,” she said. “You can’t turn back the clock on 16 years overnight. That’s not possible.”

The Canadian Centre for Policy Alternatives said investing in affordable housing and offering start-up funding for a poverty reduction strategy are welcome changes, but delaying work on the child-care promises raises concerns.

“The question is how ambitious their plan is going to be,” said economist Iglika Ivanova. “I’m expecting to see a lot more in the budget in February.”

James said the government will invest $681 million over three years to hire more teachers and provide services for students.

A Supreme Court of Canada ruling last year ordered B.C. to reinstate classroom composition rights taken away from the B.C. Teachers’ Federation about 15 years ago.

The budget update contains immediate housing initiatives for renters and the homeless and housing will remain a major focus of February’s budget.

She said the government will spend $208 million to build 1,700 affordable rental housing units and $291 million to build 2,000 modular housing units for homeless people.

“Putting people first is our government’s priority, and we’re working on a comprehensive strategy to improve housing affordability, close speculation loopholes and reduce tax fraud and money laundering in B.C. real estate,” James said in her speech to the legislature.

She said the government will cut Medical Services Premiums by 50 per cent in January and the government’s promise to increase income and disability assistance by $100 a month are budgeted at $472 million.

The budget includes tax measures that lowers the corporate income tax rate for small business to two per cent from 2.5 per cent, but increases the general corporate tax rate from 11 per cent to 12 per cent.

The personal income tax rate will jump from 14.7 per cent to 16.8 per cent for those earning $150,000 and over.

Jock Finlayson, B.C. Business Council vice president, said the business community expected the tax changes as they were part of the NDP’s election platform, but “this budget isn’t going to create a lot of new investment.”

He said the increase in personal income tax, coupled with federal government tax changes, could result in B.C. businesses not being able to attract top-job candidates.

Opposition Liberal finance critic Shirley Bond said the budget did not contain a jobs plan or an economic agenda.

“Today we see the NDP delivered a plan to spend,” she said. “There was no single mention of a jobs plan.”