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BC Politics

Is BC Getting More Affordable? Six Hints from the New Budget

Life will get easier, for some, as the NDP unveils its plan.

By Andrew MacLeod 19 Feb 2019 | TheTyee.ca

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria and the author of All Together Healthy (Douglas & McIntyre, 2018). Find him on Twitter or reach him at

The British Columbia budget introduces a new benefit for people raising children and other measures aimed at making life more affordable, but for now leaves lower-income families paying higher taxes than they would in four other provinces.

“We will never have a truly prosperous province unless everyone in British Columbia can share in that prosperity,” Finance Minister Carole James said while presenting the “Making Life Better” branded budget Tuesday morning at the Victoria conference centre.

“We know the problems we face aren’t going to be fixed overnight,” James said, blaming the previous government for allowing social problems to fester.

People had been told they had to choose between having a strong economy and investing in people. “The truth is we can and must have both,” she said.

She highlighted the success the government has had over the past year moderating home prices while presenting a budget that included increased spending for health, education, housing and child care.

Overall it includes a $2.4 billion increase in revenue and a $2.5 billion spending increase on a total budget of just over $59 billion.

Below, we’ve pulled out six budget items related to affordability for average British Columbians.

1. B.C. gets a new “Child Opportunity Benefit.”

The biggest change people are most likely to notice in their day-to-day lives is a new benefit for families raising children that will be implemented in 2020. It takes an existing benefit for people with children under six years old and extends it to the age of 18.

A family with one child will receive a maximum of $1,600 a year, with the amount phased out starting at a family income of $25,000 and unavailable to families earning more than about $100,000. The maximum benefit for families with two children is $2,600 and with three children is $3,400.

When it is fully implemented the benefit will provide $380 million a year to families.

Combined with the elimination of Medical Service Plan premiums, “a family of four earning $60,000 will see their net provincial taxes reduced by more than $2,500 per year,” the budget document said.

“That’s going to make a huge difference to families,” James said about the benefit, noting that a family with one child would receive up to $28,800 over their childhood.

Iglika Ivanova, a senior economist with the B.C. office of the Canadian Centre for Policy Alternatives, said, “It’s obviously welcome given the high cost of living in this province.”

It will not, however, lift many people out of poverty, she said.

2. There are small increases to income assistance.

The budget increases income and disability assistance rates by $50 a month starting on April 1, 2019.

The government previously raised welfare payments by $100 a month in its 2017 budget update, which at the time was the first significant increase in a decade. A single person on regular income assistance will receive $760 a month, about 25 per cent more than when the NDP formed government.

Edith MacHattie, the BC Health Coalition chair, said that the amount is a drop in the bucket. “People can’t live like that.”

There are also measures to help people obtain identification so they can get income assistance and other services, as well as allowing people to have more assets without becoming ineligible for help.

3. Student loan interest has been eliminated.

The government is following through on a promise to eliminate the interest on student loans.

The average student will graduate with $11,200 in student loan debt and pay $2,300 in interest if they repay the loan over 10 years. Eliminating that interest will cost the government about $32 million a year.

James said the policy would allow students to focus on learning instead of worrying about debt and to start their career on the right foot.

“Students are really happy about this,” said Arun Armutlu, the chairperson of the B.C. Federation of Students.

While there’s more that would be helpful, including freezing or reducing tuition fees, the change will help not only people who are studying now, but also those who have already completed their studies, he said.

4. There are new funds for a provincial ‘rent bank.’

The budget includes $10 million for a rent bank that will help people who in an emergency are unable to make ends meet.

“This will provide access to loans for vulnerable families in need of immediate assistance to avoid eviction from their homes,” the budget said. “Through this measure, families will be provided protection from falling into homelessness and deep poverty.”

The idea is to provide immediate, short-term loans. James said, “There isn’t any benefit to any of us if those who already have a home are thrown out on the street.”

There was, however, no sign of the $400-a-year rebate for renters that the NDP promised in the 2017 election campaign.

“It is something we’re working on with our Green colleagues,” James said, noting the government has taken various steps to make rents more affordable, including reducing the allowable rent increases to two per cent.

5. B.C.’s low-income families still pay more tax than those in other provinces.

Despite the affordability measures in the budget, a family of four with an income of $30,000 a year still spends more on direct provincial taxes than it would in four other provinces.

The comparison is available in a table on page 114 of the Budget and Fiscal Plan, and includes income, property, sales, fuel and carbon taxes, as well as child benefits and health care premiums.

In B.C., the low-income family would pay $216 in taxes, while in Alberta, Ontario, Quebec or Saskatchewan they would receive more back in benefits and tax breaks than they would pay.

A family of four in B.C. with income of $90,000, however, pays lower direct provincial taxes than any province other than Alberta. And a single person making $80,000 a year has the lowest provincial taxes in B.C. in the country.

6. This budget has a lot of wiggle room should things go wrong.

The budget contains significant wiggle room that is likely to make surpluses grow from what the government is predicting today.

In the current year, there’s a $500-million forecast allowance — used to provide some margin in case there’s a general economic downturn — even though the year is already three quarters over.

In 2019-20 there’s a forecast allowance of $500 million for the year, plus another $750 million for contingencies.

They may, of course, get used. The government has written down more than $1 billion to ease BC Hydro’s debt and is looking at a $1.18 billion loss at ICBC.

It cost in the order of $930 million to fight forest fires last summer, significantly more than was budgeted and much more than was spent in past years.

The CCPA’s Ivanova said, “I do think it’s overly fiscally prudent.” She welcomed increased spending on infrastructure, but said the province’s debt-to-GDP ratio is still on the low side. “There’s room to do more.”

But as a note at the front of the budget document puts it, “Government’s economic and fiscal prudence measures generally have resulted in government exceeding its budget targets.” In other words, they tend to contribute to larger-than-expected surpluses each year.

Or, as James framed it, the budget is balanced from both a social and a fiscal point of view.  [Tyee]

Read more: Politics, BC Politics

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