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Liberals table a balanced budget
The B.C. Liberal Government yesterday presented a 2015 provincial budget that is balanced with a small surplus – making the province the only one in Canada in the black. It is the third straight year that the province has tabled a balanced budget.
“The discipline we showed through the recession to bring the budget into balance has given us the flexibility to make modest, strategic investments that maintain public services like health care and education, as well as strengthen and encourage growth in key economic sectors,” stated Minister of Finance Michael de Jong.
“Budget 2015 helps make life a little easier for families and those in need. Starting in September, parents receiving both income and disability assistance and child support payments from a non-custodial parent will be able to keep every dollar they receive in child support over and above what they receive in assistance,” he said.
“The diversity in our economy and export markets have insulated B.C. from the worst of the economic downturn. Budget 2015 will support further diversification by creating a new partnership with the maritime shipping industry, continuing our partnership with the growing aerospace industry, and helping B.C. businesses tap into the opportunity represented by the new renminbi hub to sell their products and services to China,” de Jong stated.
Kootenay East MLA and Minister of Energy and Mines Bill Bennett pointed out that the Official Opposition NDP earlier stated it wasn’t possible for the province to table a balanced budget.
“It appears B.C. will be the only Canadian province to balance their budget in 2015-16; remember when the NDP said this wasn’t possible?” Bennett said, pointing out that between 1984 to 2005, the BC government (three different parties) “balanced the provincial budget only four times; this gives people a perspective on how difficult it is to balance a provincial budget (even though most people have no choice but to not spend more than they earn),” he said.
“How do we do it? One: since 2001, we have taken our commitment to manage the public’s money carefully and responsibly – it’s easy for politicians to give away the money that taxpayers send us, a lot more difficult to say no when we can’t afford something and make all decisions on a principled basis,” Bennett outlined, adding, “we inherited a $2 billion deficit in 2001, got government spending under control over a few years, balanced five consecutive budgets until recession of 2008 and went back into deficit but created a plan that we have stuck to; Now we are back balancing our budget with their third one in a row.”
A diverse economy is helping the province stay ahead, Bennett said.
“B.C.’s economy is diverse, not dependent on one sector (oil for example); B.C. has forestry, mining, agriculture, tourism, oil and gas, high tech, film and TV. We have also developed new markets in Asia, so unlike Alberta and Ontario that sell over 80% of their exports to the U.S., BC now sells approximately 50% of our exports to the U.S.,” he explained.
Bennett said economic growth is predicted by the Economic Forecast Council to be: 2.6% in 2015/16; 2.8% in 2016/17; 2.5% 2017/18 and the Conference Board of Canada says B.C. will be first or second in economic growth in Canada.
Even better, Bennett said, provincial government forecasts do not include liquid natural gas (LNG).
“There is no revenue from LNG factored into our forecasts. We expect final investment decisions from some of the 19 LNG proponents and with even one final decision, investment will be in the billions so B.C.’s prospects will even be better.
As of this spring, B.C. has the lowest level of credit card debt since 1991,” Bennett said, explaining, “credit card debt is money that government borrows to pay for annual operations, as opposed to money government borrows to build infrastructure. We paid off the billions borrowed by NDP governments in the 1990s but then when the recession happened in 2008, we also had to borrow to pay for operating costs (rather than cutting health, social and education services). We are paying that borrowing back and now, B.C. has the lowest level of ‘operating’ or ‘credit card’ debt since 1991. We believe this is what the people want us to do, rather than rack up more debt for our kids and grandkids to deal with.
Our capital budget will be $10.7 billion over three years; none of it borrowed money; and it will be for schools, colleges, hospitals and highways.”
Columbia River-Revelstoke MLA Norm Macdonald (NDP) says the provincial budget is a handout to millionaires.
“The big news of this budget is that the top two per cent of income earners are getting a $230 million tax break. That’s nearly a billion dollars given away in just four years,” Macdonald said. “Imagine what a billion dollars could do in education, on our highways, or in raising children out of property. But instead, if you earn a million dollars, (Premier) Christy Clark is giving you a $17,000 bonus.”
At a time when people living in poverty are being told we can’t afford to make life easier, and while British Columbia’s middle class is being squeezed by BC Hydro increases, Medical Services Plan fee hikes and drastic cuts to services, the only thing significant announced in this budget is a major handout to millionaires, he stated.
Macdonald drew a parallel between the amount provided in assistance for a person with a disability and the amount of money being given away to the richest people in our province. A person on provincial Person with Disability (PWD) benefits receives $906 per month for a total of $10,872 per year, more than $6,000 less than the amount of this tax break.
“And it is not just those living in poverty who are being hurt by this budget, the middle class is continuing to feel the squeeze. BC Hydro rates are way up. Provincial parks fees are way up. And people will pay even more for Medical Services Plan premiums, a fee that no other province charges,” declared Macdonald.
“And if you are injured or develop a debilitating illness, you will be pushed into a state of poverty that even Conservative Alberta does not tolerate. At least in Alberta, PWD rates are nearer to $20,000 a year.”
The budget doesn’t address the real issues that have been raised by the people of Columbia River-Revelstoke, Macdonald continued, pointing out that seniors’ care, education and health care are being ignored, and the commitment to complete the Trans Canada Highway project is still unfunded.
“I won’t be supporting this budget. I’ll be speaking against it in the House outlining why it fails my constituents, and I will be voting against it,” he concluded.
While the Official Opposition drills holes into the budget, the BC Chamber of Commerce and Cranbrook Chamber of Commerce are congratulating the provincial government for a third consecutive balanced budget.
Cranbrook Chamber President Dave Struthers summarized the budget as, “Not a ground breaking day but good for an organization like ours.”
“We are the only jurisdiction in Canada that can lay claim to a balanced budget. Our debt to GDP is the envy of the majority of the western world. Our credit rating remains very strong providing significantly less expensive borrowing for capital project across requisite to advance the province,” said Struthers
Budget 2015 forecasts an $879 million surplus for 2014/15, with a further surplus of $284 million in 2015/16. Budget 2015 includes an $800 million payment toward operating debt reduction.
Budget 2015 also includes several modest initiatives that will support on-going economic development across the province, including: an extension to the BC Interactive Digital Media and the Mining Flow-Through Share tax credit measures, a three-year extension of the BC Training Tax Credit, and an increase to the Small Business Venture Capital tax credit, the chamber noted in a media release.
“The Cranbrook Chamber, in concert with the BC Chamber, has consistently called on government to balance its books and we are pleased to see this on-going commitment to fiscal discipline’” said Chamber Executive Director David D. Hull.
“This budget continues to control spending while making modest investments into measures to help grow the economy,” said Hull. “We are able to balance successive budgets and are seeing the benefits as government puts part of projected surpluses towards paying off our operating debt.”
BC Chamber President and CEO John Winter offered, “During this time of on-going global economic uncertainty, it is important for government to continue to live within its means while finding affordable ways to drive our medium and long-term economic prosperity by enhancing our competitiveness and productivity.”
Hull has seen and analyzed decades of provincial budgets being offered and noted, “Budget 2015 is not flashy or ground breaking and that is not a bad thing.”
“The government is providing strong fiscal management with some flexibility for future years all within a context of being conservative and responsible to the taxpayers of B.C. I will take rather boring, dry, and fiscally responsible over the converse any day,” said Hull.
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