Compared to previous years, there were less significant spending measures in the 2020 budget announced by the BC NDP-led provincial government on Tuesday.
But there were still some notable moves and policy changes. Here is a rundown of the provincial government’s budget for the new fiscal year:
Provincial budget surplus
The new budget calls consecutive surpluses for the provincial government’s finances, with surpluses of $203 million for 2019/20, $227 million for 2020/21, $179 million for 2021/22, and $374 million for 2022/23.
The budget for 2020/21 is set at $60.058 billion, with $60.585 million in revenues, before the forecast allowance.
Wildfire prevention and response
The provincial government will allocate $65 million for new additional annual funding for wildfire and emergency response and prevention. This includes an increase of $35 million annually for base funding and $30 million annually for emergency program base funding.
Capital program spending
Taxpayer-supported capital spending, such as construction projects, over the next three years will total $22.9 billion, reaching the highest level ever for this expense category. This includes $6.4 billion in new and improved healthcare facilities, $2.8 billion for new and improved public schools and post-secondary facilities, and $7.4 billion for new and improved transportation infrastructure.
More modular housing
The 2020/21 budget includes $56 million in additional capital funding for 200 more new units of temporary modular housing for the homeless and people at risk of becoming homeless. This adds to the provincial government’s previous budgets for modular housing.
Drop in incentives to promote business investment
BC’s incentives to promote business investment will fall from $443 million in 2019/20 to $150 million in 2020/21, $83 million in 2021/22, and $156 million in 2022/23.
Liquor Distribution Branch projects
The Liquor Distribution Branch will spend $154 million over three years to cover the cost of renovating its liquor stores, expanding cannabis stores, and proceeding with technology-related projects, as well as replacing operating equipment.
Beginning on July 1, 2020, the provincial sales tax (PST) exemption for food products for human consumption will be abolished for all carbonated beverages that contain sugar, natural sweeteners, or artificial sweeteners.
Subsidies for electric-battery vehicles and aircraft
Funding for the highly successful Go Electric BC program of subsidizing new electric-battery and hydrogen fuel cell vehicles will be replenished with $20 million. The subsidy is up to $3,000 on a vehicle purchase. Another $5 million will go towards incentives to build charging stations in homes and workplaces.
Additionally, there will be a new PST exemption for electric-battery aircraft.
The PST will apply to online audio and video streaming services, as “Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunications, will be required to register as tax collectors if specified BC revenues exceed $10,000.” Some of these services are already paying the PST, such as cable packages that bundle Netflix and CraveTV.
A new provincial income tax bracket of 20.5% on taxable income will be created for incomes above $220,000, starting on January 1, 2020. This tax rate, targeting the top 1% income earners in BC, was previously 16.8%.
Money laundering inquiry
The provincial government will provide $11 million to fund a public inquiry into money laundering. It will make recommendations on the extent, growth, evolution, and methods of money laundering, including a review of the gaming, real estate, finance, banking, and luxury goods sectors.
Cracking down on illegal cannabis
A total of $12 million will be allocated towards resources to “ensure compliance and enforcement against the illegal sale of cannabis and related activities.” This includes funding for security checks for cannabis licensing.
Recent and upcoming systemic changes to ICBC will send the insurance crown corporation to budget surpluses starting in 2020/21, reaching $86 million. The surpluses will then grow to $148 million in 2021/22 and $191 million in 2022/23. But there will be a deficit of $91 million in 2019/20.
Additional funding of $24 million over three years will help support the creation of the new BC Access Grant, replacing the province’s existing post-secondary grant system. The new program is an upfront needs-based student grant that prioritizes financially struggling students.
It will benefit over 40,000 students, doubling the previous number of people who benefited from the grant program. Students will be eligible to receive up to $4,000 each year to help cover tuition. As well, the grant will also be open to students enrolled in non-traditional degree programs of less than two years.
Natural gas royalties rising
The province’s natural gas royalties are forecast to rise by 35% in 2020/21, reflecting higher natural gas prices and production volumes, and lower utilization of royalty program credits. Royalties will increase at a 3.8% average annual rate over the next two years.
Helping the struggling forestry industry
The collapsing forestry industry is expected to result in falling provincial forestry revenues of 12.5% in 2020/21. This is due to the impacts of lower stumpage rates and logging tax revenue.
In response, the provincial government will provide $13 million in new funding to support economic development and revitalization in the forestry sector.