BC Budget

[inane]

The budget document : http://www.bcbudget.gov.bc.ca/2013/bfp/2013_Budget_Fiscal_Plan.pdf

http://www.vancouver...6433/story.html

VICTORIA -- Premier Christy Clark's BC Liberal government on Tuesday fulfilled its promise of returning to a balanced budget by borrowing tax increases proposed by NDP leader Adrian Dix, booking an expected $800 million windfall from the sale of government assets and properties, and by imposing extraordinary spending controls across the entire government.

The government's budget included a one per cent increase to the province's corporate income tax starting April 1, bringing the rate to 11 per cent. It also included a temporary increase in personal income taxes for people making more than $150,000 per year. Dix has speculated both would measures be part of a fully-costed NDP election platform -- due for release in the coming weeks - although his proposal would have increased corporate taxes by an extra one per cent.

Coming 12 weeks before the May election, the budget also includes a four per cent increase to MSP premiums - bringing the rate to $138.50 for families of three or more -- and a $2 per carton increase to the tax on cigarettes.

On the spending side, the BC Liberal budget cuts increases in government spending in the coming year to under one per cent - a level below the expected growth in the province's GDP and comparable to dramatic restraints the Liberals employed during their first few years in office.

After combing all these measures with plans in the coming year to sell $475 million in surplus government assets - as well as a combined windfall of about $330 million expected from the completion of the sale of Little Mountain and the sale of the Vancouver Liquor Distribution Branch warehouse -- government says it will end the year with a $197 million surplus.

"Today I am presenting what we promised to the people of British Columbia, and what they have worked hard to achieve - a balance budget," Finance Minister Mike de Jong told the legislature as he introduced the province's first balanced budget in five years.

"We will not spend money we don't have," he continued. "We will not have a legacy of needless debt."

John Winter, president of the BC Chamber of Commerce, applauded the government on its return to balance.

"Good on them for living up to the commitment to balance the budget, it's hard to do but I think it's realistic," he said.

Winter's only criticism was that the government did nothing to soften the blow to business that will come with a return to the PST.

Greg D'Avignon, president of the Business Council of British Columbia, agreed. He said he thinks the government's projections are credible, but raised pointed concerns about the return to the PST and other increasing costs.

"There's a layering on of costs of doing business here in British Columbia and we are uncompetitive," he said, taking an uncharacteristic warning shot at the business friendly BC Liberal government.

"We were one of the most competitive jurisdictions in North America and we're going to become one of the most uncompetitive. That has an impact on job creation, on economic growth."

Union leaders were highly critical of Tuesday's budget, questioning a decision to balance the book months before the May election on the back of planned asset sales.

"This is not a balance budget," said Jim Sinclair of the B.C. Federation of Labour. "We're going to fire sale so he can balance the budget," he added.

Sinclair also blasted the government on plans to shrink the public service by about 1,200 spaces over two years.

"This budget kills 1,200 jobs in British Columbia that are good paying jobs that support communities in healthcare and education and forestry," he said, in comments that were echoed by British Columbia Government and Service and Employees' Union president Darryl Walker.

"They call it attrition but it's still warm bodies that are going to be in cold seats," said Walker.

"People are going to be doubling up; they're going to be doing twice as much work. There's fear that people are going to be put in positions of danger."

Spending controls in Tuesday's budget are spread throughout government, but are felt most prominently in healthcare, where projected increases are dropping to 2.6 per cent from a previous annual average of 4.4 per cent. Between 2005 and 2008, health spending grew by about seven per cent per year.

Tuesday's projections mean the health sector will see an increase for the coming year that is $234 million less than what government projected at this time last year.

Government says it can accomplish this without sacrificing the quality of health care because of new rules for pricing on generic drugs, possible measures to reduce the cost of labs and by negotiating a hold-the-line contract with the province's doctors.

British Columbia Nurses' Union president Debra McPherson was not convinced.

"We're quite concerned about this budget," she said.

"On the overall funding increase, we see the health authorities getting a 2.3 per cent lift. In last year's forecast they were told they'd be getting 3.6. We don't think that's going to cover inflation and population growth."

Hospital Employees' Union secretary-business manager Bonnie Pearson was critical of the scaled-back increases, saying it means health workers will have to do more with less. She also took aim at the increases to MSP premiums.

"We think it's a sad commentary that by 2015 more of the provincial revenue will come from MSP premiums then come from corporate taxes," she said. "I don't think that's a sustainable model for B.C. families."

Government is increasing MSP premiums by about four per cent on January 1, 2014, bringing the rate to $69.25 for a single person per month, and $138.50 for families of three or more.

To help with balancing, government also saved around $150 million that would have been due in the incoming year by pre-paying a variety of grants and other obligations during the outgoing year - a time when government incurred a more than $1 billion deficit.

Speaking Tuesday, de Jong called the government-wide spending controls "plausible and achievable".

"We knew it wouldn't be easy to get back to surplus budgets," he said, adding the cost has meant Tuesday's budget has not been able to include the usual pre-election spending spree.

"That will give our province an edge in attracting investment in a still-uncertain global economy."

Across all of government, spending is projected to increase by just 1.5 per cent each year over the next three years.

While de Jong stressed the prudence of Tuesday's budget, he was able to unveil some pre-election goodies, mostly focussed on helping families.

Government has changed a program introduced by former premier Gordon Campbell that has invested $1,000 for every child born after 2007 in a government managed post-secondary education fund. Parents were told they could expect a payment of about $2,200 for their child's post-secondary education by the time the child graduated high school.

On Tuesday, Clark's government announced parents can now access that fund much earlier, by having the province deposit $1,200 directly into the child's Registered Education Savings plan.

"When the child turns six years of age the government will send to their family - direct into an RESP -- $1,200," said de Jong, adding he hopes the measure will encourage parents to start registered savings plans to help pay for their children's university or college educations.

Tuesday's budget also includes a commitment of $76 million over three years to help create childcare spaces, as well as additional tax relief for parents starting in 2015. That tax relief program - the BC Early Childhood Tax Benefit - will be worth $660 for families making under $80,000 annually.

The temporary personal income tax increase promised in the budget will cover only the top income tax bracket, or those making more than $150,000. The move - which will last for two years until the end of 2015 - will raise the provincial rate to 16.8 per cent from 14.7 per cent.

For a person making $300,000, the increase would mean an extra $3,100 in taxes each year.

"We are asking people who make a little more to contribute a little more," said de Jong, adding the measure was needed to help return the province to a surplus position.

Tuesday's budget brings the province to a projected debt of $62.7 billion for the coming year, raising the province's debt-to-GDP ratio to 18.2 per cent.

Read more: http://www.vancouver...l#ixzz2LOEZ344e

[inane]

Selling assets to balance a budget is ridiculous. Capital and operating should not be mixed.

[inane]

http://www.langleytimes.com/opinion/191906461.html

Editorial — Tax boosts a backhanded compliment to opposition

The BC Liberal government’s plans to boost income taxes on business and high-income earners

takes a page

http://www.bclocalnews.com/news/191902741.html' rel="external nofollow">

out of the NDP opposition’s plans, and makes sense.

The NDP plan had called for the corporate tax rate to go to 12 per cent, where it stood in 2008. The BC Liberals are boosting the corporate tax rate to 11 per cent on April 1.

The provincial government also will impose a higher personal income tax rate on individuals with incomes of $150,000 or more. Their provincial income taxes will rise 2.1 per cent to a rate of 16.8 per cent, as of Jan. 1, 2014.

Both of these tax increases are necessary at this time, given the financial shackles the province is in. It has been running large deficits, at least partly because of much lower natural gas prices, which have affected government revenues.

The province is claiming it will balance the budget in 2013-14, largely because it plans to sell $800 million in surplus property. Given that the real estate market has softened somewhat, that is probably an optimistic figure. There is nothing wrong with selling surplus properties, but there are probably too many properties on this list.

The provincial government is also boosting MSP premiums again next year. This is completely unfair to moderate income earners, who do not get the exemption from paying the premiums that goes to low income people. This will be the fifth year in a row the premiums will increase, and they will have jumped by 28 per cent since 2008. There should be no additional boost in MSP premiums.

This budget is crafted with the May 14 election in mind, and while its revenue assumptions may be sound, as economist Tim O’Neill asserted on Monday, it is very much a political document.

It is designed to convince wavering voters that the BC Liberals are competent money managers. Over the course of the past 12 years, the Liberals have been sound money managers much of the time, but in recent years their record has been more mixed.

The Liberals were hoping for a big boost in revenue through the HST, but that was torpedoed by voters because of the bumbling way the government brought in the tax. That hurt their reputation as competent managers.

By adopting part of the NDP platform, the Liberals may have unintentionally telegraphed that the NDP too has good fiscal ideas.

And a comment from Lesli Boldt--If the BC debt is twice what it was under the NDP (62.7B vs 35.5B in 2002), how are the Liberals winning on fiscal responsibility?

Good question.

[ronthecivil]

Selling assets to balance a budget is ridiculous. Capital and operating should not be mixed.

[Wetcoaster]

BC Budgie???

[inane]

And yet one post down you ask how the debt has gone up so much. Well, the liberals did a lot of capital spending that wasn't in the operating budget.....

Oh, and selling assets when they are at historic highs is an awesome idea.

[ronthecivil]

To cover operating costs? Come on Ron...

[aGENT]

I still don't get why we even have corporate taxes...? It's all borne by the consumer in the end so we're kidding ourselves if we think corporations are actually contributing tax dollars.

Structure it so any money staying in the business (expansion, equipment, workforce investment etc) is not taxed. As soon as the money leaves the corp (stockholders, capital gains, income etc), you tax THOSE.

Wouldn't that encourage business investment, growth, jobs etc?

[inane]

It's a good idea period.

To cover operating costs they did raise taxes and reign in spending. That's a step in the right direction.

In a slow economy the tax increases they already put in are about as much as we could probably take (and it might even be too much time will tell). If you know budgets that could be massively cut without the entire province going on strike I would be keen to hear them.

[aGENT]

It's a good short term idea. Which of course is all these clowns think of.

[ronthecivil]

I still don't get why we even have corporate taxes...? It's all borne by the consumer in the end so we're kidding ourselves if we think corporations are actually contributing tax dollars.

Structure it so any money staying in the business (expansion, equipment, workforce investment etc) is not taxed. As soon as the money leaves the corp (stockholders, capital gains, income etc), you tax THOSE.

Wouldn't that encourage business investment, growth, jobs etc?

[ronthecivil]

You obviously didn't hear Double C's speech about long term planning, LNG etc a week or so ago

[aGENT]

The government needs money.

Although the fact that corporate taxes are already paid is why capital gains and dividends get preferential tax treatment.

And if you did do something like that you could end up with a heck of an unintentional consequence we are seeing right now where companies are all worried so they are sitting on piles of cash and not distributing it at all. In that situation they are in effect re-investing 100% of their taxes and would see corporate taxes dry up at exactly the wrong time.

[Lancaster]

Sinclair bashing the the government for cutting public service jobs, lol.

[ronthecivil]

Sinclair bashing the the government for cutting public service jobs, lol.

[Gross-Misconduct]

The Liberals can't be trusted on a good day, why would anyone believe the garbage Mike DeJong served up today?

But let's pretend the Liberals are trying to govern the province and not in say-anything-to-get elected mode. This budget has some of the NDP ideas that Dix has been saying for awhile now. Like the raising of corporate taxes and an increase to high end earners. But the Liberals trying to sell this as a legitimate balanced budget is laughable. It's balanced once we sell off 800 million is assets? lmao! And don't forget, DeJong relies on an increase in income from BC Hydro in this "balanced budget" We'll, do the math people. I did. If his projections are right, that will mean at least a 30% increase in everyone's Hydro bill to make up that revenue. But of course, DeJong didn't say that. And the MSP is going up yet again. That means the MSP has gone up 90% since 2001 (the year the Liberals took power.) The liberals lean hard on hard working families for their coffers. By the way, BC is the only province that charges MSP.

Anyone who still drinks the Liberal kool-aid needs to wake up. They are not the fiscally responsible government they pretend to be. The B.C. debt has increased 1.4 billion every year since they've been in power. That's double the provincial debt we had in 2001 (the year the Liberals took power). They wasted 200 million on software that had to be junked. They axed BC Place having a new name that would have generated some revenue because Christy Clark had a hissy fit with the president of Telus. And on and on it goes.

The Liberals are a joke. They are out of ideas. They are tired. They need to go.

[Wetcoaster]

The Liberals can't be trusted on a good day, why would anyone believe the garbage Mike DeJong served up today?

[Grapefruits]

The Liberals can't be trusted on a good day, why would anyone believe the garbage Mike DeJong served up today?

But let's pretend the Liberals are trying to govern the province and not in say-anything-to-get elected mode. This budget has some of the NDP ideas that Dix has been saying for awhile now. Like the raising of corporate taxes and an increase to high end earners. But the Liberals trying to sell this as a legitimate balanced budget is laughable. It's balanced once we sell off 800 million is assets? lmao! And don't forget, DeJong relies on an increase in income from BC Hydro in this "balanced budget" We'll, do the math people. I did. If his projections are right, that will mean at least a 30% increase in everyone's Hydro bill to make up that revenue. But of course, DeJong didn't say that. And the MSP is going up yet again. That means the MSP has gone up 90% since 2001 (the year the Liberals took power.) The liberals lean hard on hard working families for their coffers. By the way, BC is the only province that charges MSP.

Anyone who still drinks the Liberal kool-aid needs to wake up. They are not the fiscally responsible government they pretend to be. The B.C. debt has increased 1.4 billion every year since they've been in power. That's double the provincial debt we had in 2001 (the year the Liberals took power). They wasted 200 million on software that had to be junked. They axed BC Place having a new name that would have generated some revenue because Christy Clark had a hissy fit with the president of Telus. And on and on it goes.

The Liberals are a joke. They are out of ideas. They are tired. They need to go.

[literaphile]

But if you replaced those corporate taxes with income, capital gains etc you'd replace those tax dollars... It just seems to me there has to be a better system.

[silverpig]

I still don't get why we even have corporate taxes...? It's all borne by the consumer in the end so we're kidding ourselves if we think corporations are actually contributing tax dollars.

Structure it so any money staying in the business (expansion, equipment, workforce investment etc) is not taxed. As soon as the money leaves the corp (stockholders, capital gains, income etc), you tax THOSE.

Wouldn't that encourage business investment, growth, jobs etc?