I want to thank all of you who have sent me your best wishes over the past week, the response has been overwhelming. As I have settled in to the reality that this will be my last term I have redoubled my efforts on a few key files. Hopefully I will be able to advance them and complete some of the unfinished business. I hate leaving things undone!
This past week was out budget for 2013-2014. Mike de Jong did a great job putting together what I have been calling a “Responsible” budget. Given our commitment to balancing the budget many tough decisions had to be made and priorities set. This, of course means some will be disappointed but when you pull all of the elements of the budget together I think we have a package that people will recognize as being the right budget for the right time.
With the balanced budget we become one of just two Provinces in Canada (the other being Saskatchewan) with a balanced budget. Even once mighty Alberta is facing a $4 billion deficit and Ontario is looking at a $10 billion deficit. Keep in mind that our budget is $44 billion so deficits of the size being faced in Alberta and Ontario are very hard to overcome.
This week’s Top 10 is the Backgrounder provided by the Ministry of Finance. Not my usual format but good information.
The next 3 weeks we have a variety of legislation that we will be dealing with in the Legislature so I’ll only be in PG on Friday, Saturday and Sundays.
Have a great week!
1. Economic Outlook
In 2012, key economic indications such as employment, retail sales and exports show that B.C.’s economy continues to slowly but steadily grow.
The government forecasts the economy to grow by 1.6 per cent in 2013, 2.2 per cent in 2014 and 2.5 per cent in 2015.
Major risks to the economic outlook include renewed weakness or a return to the recession in the U.S., the ongoing European sovereign debt crisis which threatens the stability of global financing markets, slower than anticipated Asian demand for B.C. exports, exchange rate volatility and further weakening of the U.S. dollar disrupting global financing and commodity markets.
1. Revenue Outlook
Total government revenue is forecast at $44.4 billion in 2013 -14, $45 billion in 2014 -15 and $46.4 billion in 2015-16. Revenue is expected to average three per cent annual growth
over the next three years.
1. Expense Outlook
Total expense over the three-year plan is forecast at $44 billion in 2013 -14, $44.6 billion in 2014 -15 and $45.6 billion in 2015 -16 — an annual average increase of 1.5 per cent over
the next three years. This rate of growth will allow government to increase program spending by $2 billion over the three-year fiscal plan.
Budget 2013 confirms government’s ongoing commitment to protect health care.
Ministry of Health budget will increase $2.4 billion over three years. Total health spending by function will reach $17.4 billion, or more than 42 per cent of all government expenses
by 2015 -16.
1. K-12 Education
Block funding to School Districts continues to increase to $4.7 billion annually through 2015 -16.
A major component of Budget 2013 is the significant change to the current Children’s Education Fund. Government is building on the current fund by partnering with families and providing payments earlier through the new B.C. Training and Education Savings Grant.
Under the new program, when a B.C. resident child turns six years old, he/she will be eligible for a one-time grant of $1,200 to be deposited into the child’s Registered Education Savings Plan.
Budget 2013 also provides $1 million to expand the School Fruit and Vegetable
Nutritional Program to include milk.
1. Arts and Sports
Budget 2013 continues funding for the Sport and Arts Legacy Fund with an allocation of $60 million to continue the program first introduced in Budget 2010.
To ensure B.C.’s young people are better prepared for the creative economy, Budget 2013 allocates $18 million over three years under B.C. Creative Futures.
1. Supports for Individuals, Families and Community Safety
Budget 2013 provides an additional $292 million over the next three years to support families and vulnerable individuals.
• $76 million over the next three years to improve access to quality early learning and child care services and supports.
• $13 million in support of the Single Room Occupancy hotel renewal initiative.
• An additional $5 million for government’s responsible gambling strategy to fund enhanced treatment, counselling and prevention services to address problem gambling.
• Budget 2013 provides an additional $52 million over the next three years for increased RCMP policing costs, including hiring officers to combat organized crime and gang activity.
1. Support for B.C.’s Agriculture Sector
Budget 2013 provides an additional $4 million over three years to support the
Agricultural Land Commission for increased oversight of the Agriculture Land Reserve. Budget 2013 provides $20 million over three years for a carbon tax relief grant to help
offset carbon tax costs for commercial greenhouse vegetable and flower growers.
1. Tax Measures
Budget 2013 provides an additional $327 million in tax measures for 2013 -14 to help achieve the balanced budget and protect important services for taxpayers.
• $50 million from the temporary, two-year increase in the personal income tax rate for income over $150,000, effective January 1, 2014.
• $205 million from increasing the general corporate income tax rate to 11 per cent from 10 per cent, effective April 1, 2013.
• $17 million from increasing taxes on tobacco by $2 a carton, effective October 1, 2013.
• $32 million from phasing out the school property tax credits for light industry (class five) effective for the 2013 tax year.
• $23 million from increasing medical services plan premiums by about four per cent (while protecting premium assistance recipients), effective January 1, 2014.
1. Capital Spending
Taxpayer-supported capital spending on schools, hospitals and other infrastructure across the province over the next three years is expected to total $10.4 billion. This includes $1.5 billion to maintain, replace, renovate or expand K-12 facilities; $1.9 billion for capital spending by post-secondary institutions across B.C.; $2.3 billion on health-sector infrastructure; and $3.6 billion for transportation investments.
The total provincial debt is forecast to be $62.7 billion in 2013 -14, $66.5 billion in 2014 -15 and $69.4 billion in 2015-16. Taxpayer-supported debt is forecast to be $42.6 billion in 2013 -14, $44.5 billion in 2014 -15 and $46.1 billion in 2015 -16.
By eliminating the deficit and starting to reduce the government’s need to borrow, Budget 2013 forecasts British Columbia’s taxpayer-supported debt-to-GDP ratio will peak at 18.3 per cent in 2014 -15, and decline to 18.1 per cent in 2015 -16. Taxpayer-supported interest costs continue to remain low, averaging 4.3 cents per dollar of revenue over the three-year fiscal plan.
1. Budget Outlook
Budget 2013 projects surpluses of $197 million in 2013 -14, $211 million in 2014 -15 and $460 million in 2015 -16.
The fiscal plan includes contingencies of $225 million each year over the three year plan. The fiscal plan includes forecast allowances of $200 million in 2013 -14, $225 million in 2014 -15, and $325 million in 2015 -16 to help guard against revenue volatility.