Premier John Horgan’s morning began with chaos when pipeline protesters attempted to block him at his home and perform a citizen’s arrest. But by afternoon, stability had returned as the Premier stood alongside his Minister of Finance for the delivery of the B.C. NDP’s third balanced budget in as many years.
Here’s what you need to know about Budget 2020: A Stronger BC, for everyone:
- New (or raised) taxes
Budget 2020 introduces 22 new or raised taxes, including:
Income tax: British Columbians earning $220,000 a year and above will face an increased personal income tax rate of 20.5% (up from 16.8%), for a total personal income tax rate of 53.5%.
Sugar tax: “sweetened carbonated drinks”, currently exempt from the province’s Provincial Sales Tax Act, will now be subject to the B.C.’s 7% provincial sales tax.
Carbon tax: as expected, the B.C. carbon tax will rise another $5 per tonne in 2020, to a total of $45 per tonne.
Vaping tax: a tax of $0.295 per product will be applied to “heated tobacco products”, such as e-cigarettes.
Netflix tax: “foreign sellers of software and telecommunication services” (e.g. Netflix) will be required to register and collect provincial sales tax once specified B.C. revenues exceed $10,000.
- Infrastructure spending – what’s there, and what’s not
The budget allocates $22.9 billion in infrastructure spending over the next three years. Highlights include:
Housing: the budget suggests the government will continue its $7 billion 10-year plan to build more housing, but will neglect to implement its promise of a $400 renter’s rebate. Measures intended to combat housing affordability include the already-launched public inquiry into money laundering and the funding of an additional 200 supportive homes for people and communities in need.
Transportation: the budget sets aside $9.2 billion over five years in funding for transportation infrastructure, with much of this going towards previously announced projects in Greater Vancouver, such as the Broadway SkyTrain line to Arbutus Street and the Pattullo Bridge Replacement.
Hospitals and healthcare: the budget allocates $6.4 billion in infrastructure spending on hospitals (including $2 billion for a new St. Paul’s Hospital in downtown Vancouver).
Tech: there is no new direct spending for technology and innovation infrastructure, but there is a further $419 million allocated to CleanBC, B.C.’s climate action strategy. The strategy is heavily dependent on advancements in low-carbon products and pollution-reducing technologies.
- Looking ahead – an economic outlook
The numbers suggest a province in good economic health: Budget 2020 predicts budget surpluses for the next three years, the Finance Minister has said the province is in an “enviable position” when it comes to debt, and contingencies appear to be accounted for.
But the budget is littered with hints that the numbers might not add up. For example, B.C.’s 2019/20 share of cannabis taxes from Ottawa was just $6 million. Budget 2020 assumes this number will increase to $50 million for 2020/21 and $70 million for 2021/22. And ICBC, the province’s longsuffering public insurer, is expected to bring in an $86 million surplus in 2020/21 – despite showing a loss of $91 million for 2019/20 and despite no basic rate increases in the next fiscal year.
With an election set for October 2021 – at the very latest – the B.C. NDP will be hoping the numbers align in its favour.
Stay on top of it all with McMillan Vantage Policy Group.