Overview
The government has introduced a stay the course budget for 2019, with an estimated surplus of $274-million.
It’s the NDP’s 3rd crack at a budget since taking power in 2017 and it mostly continues to fund initiatives started in its 2018 budget. There are a few new items, such as a change in the way families receive child benefits that is more generous to the lower end of the income scale. There’s a little extra money to help some successful programs continue, such as daycare subsidies and electric vehicles credits, and additional money earmarked to build modular housing units in responds to homeless camps. The 2019/2020 budget completes the shift from MSP to the new employer health tax. And, as expected, ICBC is a major dash of red ink with an expected $50-million dollar loss for 2019/2020.
Other items the government wanted to highlight include eliminating interest on BC student loans provided through the BC Student Loan Program. They also touted new long term sharing of gaming revenue with First Nations as part of reconciliation.
Overall, there is some new spending funded in part by continued economic growth, but no major new taxes.
BC Child Opportunity Benefit
The BC Government has announced the “BC Child Opportunity Benefit,” which will replace the old “Early Childhood Tax Benefit.” The old benefit was about $660 per year for a child until they turned 6. It went up for families with more kids. Families making over $150-k didn’t qualify, but everyone under income received the same amount. The new plan increases the amount received and now goes until the age of 18. But the trade-off is that the more money a family makes, the less they’ll receive. Plus, the cut off is lower. Families making up to $25-k will make the most, about $1,600 a year for one child, and then increasing for families with more children. But the amount is reduced in steps until you reach $97-k family income for one child or $114-k family income with two kids. Once you hit those marks, you will no longer get the benefit.
This change kicks in October 2020, in order to allow time to coordinate with the Canada Revenue Agency. The whole program will cost $380-million a year.
Childcare
Last year’s budget had about $1-billion for childcare spread over 3 years aimed at reducing daycare fees and creating childcare spaces. We in the middle of those three years and this current budget doesn’t introduce anything drastically new – most glaringly, there’s no mention of $10-a-day daycare on the horizon. The government suggests anything new might come next year, once they’ve got data on how current pilot programs are going. They are adding an extra $27-m to help deal with demand, because the current initiatives have been more successful than anticipated.
Housing, Homelessness, and Poverty Reduction
This current budget stays the course set in 2018 when it comes to housing, when $7-billion over 10 years was announced to build and maintain affordable rental housing. One change in 2019 is an additional $24-million to better position the government to deal with homeless camps, such as the ones recently seen in Greater Victoria and Nanaimo. Some of that money is set aside to build 200 modular units and help acquire land in response to future camps. In the past, this response had to come out of the overall budget for affordable housing.
Income and Disability assistance (welfare) rates are going up on April 1st by another $50 a month. In another change, extended family who takes on care-giving for kids will now be able to access the same supports as foster parents.
Environment
On the environment, the 2019 Budget touts the NDP’s “Clean BC” plan they put together with the Green Party.
$902-million total is getting spent over 3 years. Some of it is to continue incentives from home retrofits, electric vehicle credits, and more public charging stations.
As for the rebates, this is a continuation of offers that have been available before. $6-k is available for hydrogen fuel cell electric vehicles, $5-k for full battery electrics, and plug in hybrids can get between $2,500 and $5,000. These aren’t new, but the Government says the programs have been so successful that they’ve spent previously allocated money so are reinvesting.
First Nations
A portion of provincial gaming revenue will now get directed to First Nations on an ongoing basis. They say it’ll be $3-billion over 25 years. There’s a formula for which nations get how much, depending on factors like population size.
More on the money
The Government expect revenue to grow by an average of 3.3% over the next three years, based on a growing economy and stronger revenue from taxation, federal contributions, and crown corporation income.
Finance Minister Carol James says another factor is that we no longer have costs associated with an operating debt, which was eliminated mostly by the previous Liberal Government.
The new employer health tax is replacing the loss of the MSP. The speculation tax is bringing in more money ($185-m), and carbon tax increases are also adding to government’s bottom line (nearly $300-m more in 2019/2020).
The resource sector is one area where the government expects a regular decline – an average of a 7% dip per-year over the next three years. The one bright spot is natural gas, where they hope to see a boost with development in Northern BC.
When it comes to crown corporations, the government expects ICBC to lose $50-million dollars. This is despite a lot of over $1-billion dollars in the last fiscal year. The Finance Minister believes measures the government has taken will make this year less painful.