Today’s B.C. budget includes free prescription contraception and long-promised grants for some renters while returning the province to annual deficits.
“People are facing real challenges,” said Finance Minister Katrine Conroy, noting that inflation is squeezing household budgets and that economists are predicting a global economic slowdown.
“The province can’t control global forces, but we can make choices that help protect British Columbians and build the stronger and more secure future we all want.”
Overall the budget shows total spending of $80.2 billion for the fiscal year that starts on April 1, on revenue of $77.7 billion. After contingencies for pandemic recovery and a substantial forecast allowance are included, it adds up to a deficit of $4.2 billion.
The new spending includes a tax credit for renters that will provide $400 to households with annual incomes up to $60,000 and smaller grants for households that earn up to $80,000. In its first year the measure will cost $307 million, about one-third of what the province provides in grants to homeowners.
The government is starting to see results on housing after five years of work, Conroy said, while acknowledging “Too many people are struggling to find a decent home even if they have a good income.”
Another NDP election promise was made good on with $39 million to provide free prescription contraception. Conroy said funding contraception is an important equity measure and that B.C. is the first province to fully cover it.
Spending on health accounts for nearly 40 per cent of the operating budget and adds up to $6.4 billion over the three years of the fiscal plan.
In the next fiscal year health spending is forecast to increase by more than 10 per cent.
In the next fiscal year the budget includes $556 million for health services, $273 million for the health workforce strategy, $399 million for the new primary care compensation model and $199 million for mental health, addictions and treatment services.
The investment in mental health and addictions treatment is the largest in B.C.’s history, Conroy said.
There’s also $875 million for the ongoing health response to COVID-19.
Along with health, there’s something for each of the four areas that Premier David Eby has identified as priorities. Housing spending includes an added $2.2 billion in operating funding and $2 billion for capital funding.
The public safety budget adds $137 million next year, the bulk of it for policing, corrections and enforcement programs.
About half of the $235 million for “sustainable and clean economy” is for the Future Ready Plan the province recently announced to address skills training and the labour market. There’s $11 million for the CleanBC climate plan and money for forest service roads and forest landscape planning.
Over the long term the budget shows rising spending on social services, particularly for child welfare and for low-income tax credit transfers.
There is $147 million for increased supports for income and disability assistance clients. The province is not raising the general rates, but is increasing the shelter rate by $125 to $500 per month, the first raise since 2007.
It also allows people receiving assistance to keep more money from employment and increases the amount available for supplements, such as support for clients facing an emergency, with kids returning to school, needing baby formula or other dietary supports.
Asked whether there was concern that increasing the shelter allowance would benefit landowners rather than giving ministry clients more to spend on their daily needs, Conroy said people who work in the sector had been advocating for the increase. “Everybody knows the price of housing has gone up and people need that support.”
A year ago the government presented a budget that included a $5-billion deficit, but by six months into the year it had swung to a $5-billion surplus, largely thanks to unexpectedly high corporate and income tax revenue.
Today’s budget still shows a $3.59 billion surplus for the current fiscal year with the government having spent some $2.7 billion of the unexpected surplus.
Much of that spending has been announced in recent weeks, with the largest expenses being $1 billion to help communities pay for infrastructure and $500 million for BC Ferries to avoid large fare increases.
Responding to a media question, Conroy said the government would continue looking for ways to spend the surplus before the end of the fiscal year.
The province can only succeed if everybody is supported, Conroy said. “Budget 2023 pays attention to today’s very real challenges while planning for an even stronger future for our province.”
In a note included at the start of the budget, Heather Wood, the finance deputy minister and secretary to the Treasury Board, warns “the near-term economic outlook for British Columbia is weaker, reflecting the combined effects of elevated price pressures and tighter monetary policy working their way through domestic and global economies.”
For the coming year the budget includes an unallocated $5.5 billion for contingencies plus a $700-million forecast allowance in case the economy is even weaker than expected, leaving lots of wiggle room that could let the predicted deficit turn into another surprise surplus.
Running deficits is appropriate considering the province is headed into an economic slowdown and there’s a backlog in needed investments, said Alex Hemingway, a senior economist with the B.C. office of the Canadian Centre for Policy Alternatives.
“I’d rather see moderate deficits than shortchanging public services and infrastructure,” he said. “Ultimately if we’re going to move towards balance, that should come in the form of increasing revenue, both through the economy picking back up and through taxation of those at the very top who continue to do extremely well.”
The budget shows the government is investing in British Columbians and recognizing that affordability and livability are challenging for families, said Sussanne Skidmore, president of the BC Federation of Labour.
The spending on health, mental health and infrastructure are welcome, she said, adding that while birth control is a small part of the budget, it’s an important step towards gender-based equity.
The federation was disappointed that no funding was included for pay transparency measures, she said, even though legislation to address the gender pay gap is supposed to be coming soon.
An associate public health professor at the University of British Columbia and the founder of the Generation Squeeze advocacy group, Paul Kershaw, said that while he was glad to see the increasing tax on carbon he would also have liked to see more increases to property and property transfer taxes.
“The one place where we have created more and more prosperity is rising home prices,” he said, noting that many ordinary British Columbians had become wealthy through home ownership and it could be taxed more.
Kershaw said he was also disappointed to see the large increases for health care and the stall on funding for child care, adding that there was no acknowledgement of how the spending generally benefits older people much more than it does those who are younger.
"Eby's first budget makes some good investments but keeps people dependent on once-a-year tax credits instead of actually making the cost of living more manageable, BC Green Party Leader and Cowichan Valley MLA Sonia Furstenau said in a statement.“Premier Eby seems to be sprinkling money around to a lot of existing programs and spending big on affordability cheques, but we're not going to solve the underlying issues that are driving big problems," she said.
“We were disappointed to see no major investments in community health centres, public transit, preventive mental health care, climate, or the environment, help for small businesses, or significant improvements to social services and supports."
BC Liberal Leader Kevin Falcon said that free contraception is a great idea that both main parties supported in the last election and the funding is “better late than never” even though it has taken three years.
Otherwise the budget is a massive disappointment, he said, pointing out that since 2017 the government has almost doubled the provincial debt to $100 billion and is projecting $11 billion in operating deficits over the next three years.
Despite the increased spending, there's no evidence anything is improving, Falcon said. “My question to British Columbians is this: after two terms of NDP government do you feel like things are better off today than they were six years ago?”
Mentioning health-care wait lists, difficulties getting a family doctor, walk-in clinic wait times and problems with public safety, he said there was nothing in the budget to give anyone hope that anything would change for the better. Falcon also criticized what he said was a lack of measures to grow the economy.
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