NDP reveal 2017 budget update
BC NDP BUDGET UPDATE 2017
The first budget from the New Democrats includes tax hikes and carbon tax increases along with new spending.
Education, housing, and the fentanyl crisis, are some of the notable areas seeing a boost compared with the previous Liberal Government’s plan for this fiscal year. But notably absent from the NDP update is any money to fulfil two major campaign promises: $10 a day childcare and a $400 dollar renters subsidy.
Tax Hikes and Revenue:
Finance Minister Carole James said the government is fulfilling its campaign promise to hike taxes on high income earners and corporations. Individuals who make over $150,000 a year will face a 16.8% tax rate on income above that threshold, up from the 14.7% rate. The general corporate tax rate is going up from 11% to 12%. The carbon tax will begin to climb again, after it was frozen in place under Christy Clark’s administration.
However, not all measures are hikes.
MSP premiums will be slashed by 50% as of January 2018. A task force will be created to advise the best way to eliminate MPS all together and find a way to pay for it).
The small business corporate income tax rate is being reduced to 2%, down from 2.5%. PST on electricity is being phased out, starting with a 50% cut this fall. And credit unions are getting new tax breaks.
This budget includes a lot of spending promises, but overall the books are still in the black. The surplus won’t be as handsome this year, but revenues are up. In 2017/18, the NDP government plans to spend $51.8-billion, bring in $52.4-billion in revenue, and end up with a surplus of $246-million.
The NDP are resuming hikes to the carbon tax and have scrapped the previous Liberal Government’s practice of revenue neutrality - that’s where all the money raised by the carbon tax had to be offset by tax cuts. Now, under the NDP, that extra revenue will instead be directed towards green initiatives. While short on detail, the minister told reporters that the carbon tax won’t be folded into general revenue, and the programs and projects it funds will be transparent.
The first increase will be an extra $5 a tonne of CO2 starting April 2018. The rate will eventually hit $50 a tonne by 2021. That plan exceeds the requirements of the Pan-Canadian Framework the Federal Government negotiated with the provinces. Lower and middle income British Columbians will see extra tax credits to offset the carbon tax hikes.
The budget promises relief for people struggling to find housing.
In total, the government will shell out more than $600 million to build 1,700 units of affordable housing. It will also build 2,000 units of modular housing for the homeless, and provide an operating budget to staff this housing.
There is also some good news for landlords and tenants. It’s just a small bump in the budget – of $7 million – but the money hopes to address the growing number of conflicts in this tight rental market. The new money will hire 30 extra people to help resolve disputes between renters and their landlords. The new money will also fund a new compliance unit, which is empowered to take meaningful action against repeat and serious offenders.
For people in the market looking to buy or sell a house, today’s budget included no announcement of any new real-estate taxes, such as a speculation tax, to cool the market.
One of the big, new spending items in this budget is for education, kindergarten through grade 12. School districts have been on a major hiring spree for teachers – but there’s still more work to do to meet the requirements of a recent Supreme Court ruling dictating class size and composition. Today’s budget committed $681 million, spread over three years. The bulk of that money will be for hiring more teachers and other supports. The remaining $210 million will be spent on funding growing enrolment and new classroom space.
A big chunk of new spending is to deal with the ongoing fentanyl crisis in B.C. $322-million is going to “provide an immediate and evidence based response.” That money is going in a number of different directions, most of it directly to the Ministry of Health dealing with the crisis on the front lines. $32-million will increase police resources to tackle drug trafficking and ease pressures on the overburdened coroner’s service. $25-million is going to create the Ministry of Mental Health and Addictions, which will provide leadership on the file.
The budget for firefighters has now surpassed a half billion, up for the meager $63 million allocated in last February’s budget. But the spending doesn’t stop there. To help people affected, and prevent future wildfires, the government is kicking in an extra $255 million for the Canadian Red Cross, 10 new wildfire bases across the province, and other prevention initiatives that communities can apply for.
Campaign Promises Missing:
Two NDP campaign promises were conspicuously absent from their first budget document. The New Democrats had pledged to introduce a $400 rental subsidy to help with housing affordability. The Party to take steps to make childcare more affordable with an end goal of $10/day childcare. but neither of those promises were addressed. The Finance Minister faced several questions from reporters on the absence of those items and she blamed the drawn-out end to the election. James said the government is still committed to fulfilling those platform promises and that we should watch for their budget in February 2018. She also mentioned the need to consult with the Green Party, who’s support they need to maintain confidence of the house, before they move forward.