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Surplus Down but NDP Has Hopes for Growth

Priorities for next provincial budget will depend on revenue, finance minister says.

By Andrew MacLeod 29 Nov 2017 | TheTyee.ca

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

Despite a narrowing budget surplus, the British Columbia government is well placed to make the investments in people that it has promised, Finance Minister Carole James said Tuesday.

“I am optimistic and there are a few reasons,” James said while presenting the second quarterly report on the 2017-2018 budget. “A number of our promises are longer term and implemented over a number of years.... Certainly we hope that the resources and the growth in the economy will continue and we’ll in fact see stronger growth.”

James gave the examples of housing and child care, areas where the NDP’s commitments project out 10 years. “If you look at some of the key investments we’re putting in, we in fact believe they will help us grow the economy,” she said. “Investing in affordable housing is going to help employers who are looking to invest in British Columbia and talking about the challenge of finding housing for their employees.”

The report showed a $190 million operating surplus, down slightly from the $246 million forecast in September.

Major changes included a $643 million drop in personal and corporate income taxes and a reduction in revenue from Crown corporations, partly offset by $175 million more than expected from the property transfer tax and an increase in transfers from the federal government.

The province paid a record amount to fight forest fires in the summer, adding a $152 million expense, and drew down $200 million from its forecast allowance.

James said that overall the budget is stable and she pointed out it still includes $600 million for contingencies in the second half of the year.

During last spring’s election, the NDP’s spending promises included eliminating medical service plan premiums, a rebate for renters, a freeze on Hydro rates, ferry fare reductions and $10-a-day child care.

James said that any finance minister in the country would like to have more resources to work with, but that budgeting is about making choices. “As we go into the February budget we will set priorities,” she said. “We’ll set priorities, we’ll look at the revenue that’s available, and we’ll build our budget based on that.”

There were many unmet needs when the NDP formed government, James said. “Having a large surplus when children are going to bed hungry, when housing is such a crisis, when income assistance had not seen an increase in their rates for over 10 years, is not good fiscal management.”

She added, “Good fiscal management is making sure the economy is strong, and the benefits of that strong economy are felt by all British Columbians. That is what was missing in the previous government and that’s why you’ve seen in this budget a focus on prudence, a focus on stability in the economy, and a focus on key investments that will make a difference in the lives of people in this province.”

In an emailed statement, BC Liberal finance critic Shirley Bond said the positive numbers in the report were the result of the former government's focus on economic growth and job creation.

“Stable, sustainable economic growth is simply not possible if this government continues to cancel projects, conduct multiple expensive, lengthy reviews and consultations without any sign of an economic development strategy,” she said. “They have already managed to dip into British Columbia’s savings and they haven’t even fulfilled most of their major campaign spending promises.... We will be very interested to see how the finance minister plans to balance the first full NDP budget since the election.”  [Tyee]

Read more: BC Politics

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