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B.C. set to table pre-election pay-back budget with surplus cash: government

B.C. pre-election budget to pay back with surplus

VICTORIA — British Columbia’s finance minister says five consecutive surplus budgets and a nation-leading economy has the government prepared to spend money after years of penny pinching.

Mike de Jong said Monday that broad tax relief for residents and small business operators are part of the budget he tables Tuesday, just months ahead of May’s provincial election.

The budget comes a week after Premier Christy Clark said her Liberal government will pay back taxpayers for financial sacrifices of recent years.

“We are trying to ensure the benefits of our nation-leading economy are shared by the widest possible group,” de Jong said a news conference at a Victoria shoe repair shop. De Jong skipped the budget tradition of buying new shoes again this year and had old pair of black Bostonian brogues shined, stitched and re-soled.

B.C. leads Canada in job creation, but RBC forecasts economic growth will slip below the national average for the first time in six years.

De Jong said B.C.’s Children and Family Development Ministry can expect a budget increase.

The government has been on the defensive over recent tragic deaths of children in its care and scathing reports of child welfare system failures.

He deflected questions about calls to cut the provincial sales tax and medical services premiums: “We’ll see.”

The right-leaning Canadian Taxpayers’ Federation and left-leaning Canadian Centre for Policy Alternatives both want the government to dump the health-care premium of fee that ranges from $11 to $75 per month for those making over $24,001 a year.

“We should eliminate the MSP in B.C.,” said Alex Hemingway, a centre for policy alternatives analyst. “No other province has it. It’s the most unfair tax we have.”

A one percentage cut to B.C.’s seven per cent PST would cut annual revenues by $900 million, while the MSP raised $2.5 billion for the government last year. 

“I’m very comfortable. We’re in a position now, unlike any other province in the country, to begin to address priority areas, leave more money in citizens’, taxpayers’ pockets and not incur deficits to do it,” said de Jong.

Known as a tight-fisted money manager, de Jong said the time is right to start spending.

Ministry of Finance reports projected the budget surplus to be about $2.2 billion, but other than say the new budget will be balanced, de Jong has not provided a surplus estimate.

The government made several funding announcements in the days prior to the budget, including increasing monthly disability payments by $50, a one-time grant of $29.4 million to help school districts purchase classroom supplies and $140 million to improve patient access to mental-health initiatives.

A Supreme Court of Canada ruling last year in favour of B.C.’s teachers could see the government adding up to $300 million annually the education budget to fund extra teachers and classroom assistants.

“There will be no shortage of criticism about why didn’t you do more here and why wasn’t the tax relief greater,” said de Jong. “We try to make these choices as best we can.”

He said the new 10-year, $1.4 billion health funding deal with the federal government could impact B.C.’s bottom line in the coming year.

Social welfare groups and opposition say the B.C. government created compassion deficits while pursuing budget surpluses.

Opposition New Democrat Leader John Horgan said relief promises ring hollow, especially vows to increase the children’s ministry budget.

“They should have been putting resources in, not in a pre-election period, but right off the bat,” he said.

Bryan Yu, a senior economist at Central 1 Credit Union, said he doesn’t see the government scrapping the MSP completely.

But he said he sees budget priorities aimed at rural B.C. where the economy is hurting.

“I suspect there will be some measures focusing on that rural-urban divide because the unemployment rates outside of Metro Vancouver are significantly higher,” Yu said.

He said last year’s 15-per-cent foreign buyers tax and a first-time home buyers loan plan helped ease housing concerns in Metro Vancouver.

Dirk Meissner, The Canadian Press