VANCOUVER — British Columbia’s New Democrat government is expected to unveil its first budget on Monday following last week’s ambitious throne speech, but experts expect the financial update will be little more than an appetizer ahead of the main course early next year.
David Moscrop, a political scientist at Simon Fraser University, said holding back on anything but the most immediate and pressing commitments would be a smart move for the NDP’s fledgling minority government, both economically and politically.
“I think most people would prefer that their government takes a little bit of time and reconciles their campaign promises with the books before they really get into spending.
“At the end of the day, they’ve been in office for 15 minutes. This is a little tweak.”
Finance Minister Carole James downplayed the upcoming announcement, saying the update would broadly outline the New Democrats’ election commitments, which were mirrored in the throne speech the government revealed Friday at the outset of the new legislative session.
“This really will be a budget update because normally, right now in September, we would be starting work we need for the February budget,” said James, who is also deputy premier.
The speech referenced several immediate government actions that have economic implications, including boosting education funding to comply with classroom size and composition requirements, lifting tolls on two Lower Mainland bridges and increasing welfare and disability rates.
The agenda-setting document also referenced bigger-ticket items that would see consultation work begin in the fall, such as a universal child-care program, a poverty reduction plan, public transit investment and expanded health-care infrastructure, including hospitals and patient care centres.
“Government will be consulting families on the issues that matter to them, from the housing crisis, to childcare to environmental management,” Lt.-Gov. Judith Guichon said, reading Friday’s throne speech which is prepared by the government but presented by the province’s head of state.
“By listening and building a common understanding of the problems people are facing, the solutions that will make life better will be found.”
Bryan Yu of Central 1, a trade association for credit unions in B.C. and Ontario, said he expects Monday’s interim budget to do little more than emphasize the overall health of the provincial economy.
Central 1 recently released an economic forecast lauding the state of B.C.’s economy and predicted continuing growth through to 2020, much of which he ascribed to external factors.
“What really drives the economy and drives these cycles in the economy is not the government,” Yu said.
“It’s largely the macroeconomic factors of that low Canadian dollar, the interest rate and then what comes out of that in terms of people movement from across the provinces, as well as internationally.”
Public accounts figures released in late August indicate the province finished off the past fiscal year with a $2.7-billion surplus, and some experts are questioning how that excess will be used.
Kevin Milligan, an economist at the University of British Columbia’s Vancouver School of Economics, wondered to what extent that money might be broken up between tax relief and spending on social programs.
“There’s certainly room there to do some things on the tax side beyond just increasing taxes,” he said, referencing the NDP’s election pledge to up the corporate tax rate by a percentage point and restore a tax bracket for those who earn more than $150,000 annually.
Milligan said he also expects the budget update to include provisions for several promises contained in the Green-NDP governing agreement, including commissions tasked with looking into eliminating medical premiums and reforming the minimum wage, as well as a basic income pilot study.
“You’ve got to get going on those things. You can’t let them grow a beard,” he said. “A lot of those agenda items are really important for the B.C. economy.”