The B.C. NDP government is spending through an anticipated economic downturn, anticipating wrapping up 2022 with a projected $3.6 billion surplus, and ending the 2023 fiscal year with a deficit of $4.2 billion
From 2022 to 2025, the life of the economic plan, spending will have increased by more than $13 billion, with most of it allocated to areas Premier David Eby has designated priorities such as healthcare, housing, affordability, public safety and a sustainable and clean economy.
In a presentation, finance minister Katrine Conroy said increased spending over three years includes an additional $6.4B for healthcare, $4.2B more for housing, $1.3B to tackle affordability.
New measures include:
$3 billion in tax credits, including the new income-tested Renter’s Tax Credit
Free prescription contraception estimated to cost $39 million in 2023.
People on disability assistance, will get $125 per month increase for shelter, and a $100 per month increase in earning exemptions
$230 million over three years to increase policing
A $40 million program to help businesses move to electrifying their fleets
This is Eby’s first budget as premier, and Conroy’s first as finance minister.
Despite all the spending, there are no new significant taxes. The carbon tax will rise, as per legislation.
There are, however, significant tax credits.
The BC Family Benefit will be permanently increased by 10% as of July 1st. Single parents are also eligible for $500.
The long-promised renter’s rebate is now a renter’s tax credit and is income-tested. Households earning less than $60,000 will get the full amount, after that a partial amount, and declining to $0 after $80,000.
MENTAL HEALTH AND ADDICTIONS
The province is investing $585 million over three years to expand treatment and recovery beds.
“We’re making the largest investment in health and mental health in B.C.’s history,” said Conroy.
Conroy said fees would be removed on new treatment and recovery beds, and continue on current beds.
There’s another $154 million over three years to increase access to safer supply and alternatives. More than $250 million will help to build and operate complex care facilities.
2022 BUDGET UPDATE
The 2022 budget year is expected to end with a surplus, despite new spending of $4 billion. That includes money already announced to help municipalities build infrastructure, and to help ease rate increases expected at BC Ferries.
Amounts listed in the budget but not yet announced include:
A critical community infrastructure fund of $450 million
Food security initiatives $160 million
Local Government Next Gen 911 Readiness Fund $150 million
Watershed Security Fund $100 million
Highway and Community Cellular Connectivity $85 million
Accelerating Funding for First Nations Agreements $75 million
Public Libraries $45 million
In its last fiscal update in 2022, the province projected a $5.7 billion surplus. The finance minister said that was shrinking to $3.6 billion due to increased spending. Some of that includes the BC Affordability Credit, BC Family Benefit, and rental protection fund.
Conroy said the surplus amount may change if there is additional spending.
As per legislation any surplus must be spent before the end of the fiscal year on March 31 or it goes to paying off the long-term debt.
FORECAST FOR 2023 AND BEYOND
The government is readying for a financial slowdown, while making sure what it calls key investments are made.
Economic growth is expected to slow to 0.4 percent in 2023, down from 2.8 per cent. The GDP then goes up to 1.5 in 2024 and 2.4 in 2025.
After a $4.2 billion deficit in 2023, the forecast is for a $3.7 billion deficit in 2024 and shortfall of $3 billion in 2025.