A balanced budget is worth celebrating, Kootenay East MLA Bill Bennett said this week of the 2014 provincial budget.
“This is the second consecutive balanced budget in B.C. and one of only two balanced provincial budgets in Canada – even Alberta is not balancing its budget. That is the most significant thing for British Columbians to know and to celebrate,” Bennett told the Townsman on Wednesday.
B.C. Finance Minister Mike De Jong called the budget “boring” but “a happy state of boring” when he announced it on Tuesday, Feb. 18.
“Balancing our budget allows B.C. to retain its AAA credit rating, one of only three in Canada,” said Bennett, also Minister of Energy and Mines and Minister Responsible for the Core Review.
“This is important to taxpayers because the lower credit rating means B.C. pays less interest on its provincial debt. For example, Ontario pays 9 cents on every dollar they bring in for interest on their debt, while B.C. pays 4 cents on each dollar.
“If B.C. had Ontario’s credit rating, we’d be paying $2 billion more in interest on our provincial debt. That is $2 billion that we would not have to spend on social programs, healthcare and education.”
But the budget holds the line on K-12 and post-secondary education spending, with no money included for either a $2 million court judgment against the government in favour of B.C. teachers, or funds to address issues such as class-size and working conditions at the heart of the legal dispute.
The government has publicly estimated the total potential cost of the case could reach $1 billion.
“The budget adds only a modest amount to K-12 education because we have thousands fewer children in our schools and we simply must find ways to continue delivering a high quality education while not annually increasing the per student cost (which is what we’ve done 12 budgets in a row with our government),” said Bennett.
The solution is not pouring more and more tax dollars into a school system that has ever-decreasing numbers of students, but to find smarter ways to deliver services. My Core Review Committee will be helping with that.”
The budget promises $350 million over the next three years for families and individuals most in need.
The bulk of that scant new spending — $243 million — will go to Community Living B.C. and $15 million will go to the Children’s Ministry for children and youth with special needs.
The rest of the spending touted for families will go to the RCMP policing costs, which will see a $15 million increase, and $6 million for legal-aid services.
Bennett said the budget also includes $2.3 billion in funding for skills training facilities at post-secondary institutions.
The province will proceed with a previously announced B.C. Training and Education grant, which provides $1,200 as a one-time payment for every child in B.C. born in 2007 or later whose family has a registered education savings plan in their name.
The budget also confirms the previously announced B.C. Early Childhood Tax Benefit, which will provide a tax benefit of up to $55 per month — $660 a year — for children under six years old beginning April 1, 2015.
And starting Wednesday, the government will increase the threshold for a first-time home buyers exemption from the property tax transfer from $425,000 to $475,000.
B.C. residents will see a $2.50-per-month increase in maximum monthly premiums for the Medical Services Plan but no change in personal income tax rates.
De Jong acknowledged there was little to ease the tax burden on families.
“Admittedly, the tax relief in this budget is pretty thin,” he said.
“I don’t want to in any way pretend that the advent of these programs suddenly makes life so much easier for families. It’s a modest contribution but a positive contribution, nonetheless.”
Jim Sinclair, president of the B.C. Federation of Labour, said the government’s budget may be balanced, but electricity rates will go up, education spending will go down and health-care premiums will increase.
“There’s a lot of pressure on families, so their budget may be balanced in the cabinet, but it’s not balanced out here for people,” Sinclair said.
Meanwhile, B.C. credit unions are applauding the provincial government’s decision to extend the small-business tax benefit for the province’s 44 credit unions through 2016.
The decision will save B.C. credit unions about $20 million in additional taxes, said Jody Burk, chief executive officer of the East Kootenay Community Credit Union.
“The B.C. government’s announcement that the provincial tax rate of 2.5 per cent will be maintained for credit unions until 2016 has a significant positive impact on credit union operations and their ability to service their members and communities within B.C.,” said Burk.
East Kootenay Community Credit Union has over 12,000 members in the East Kootenay, with branches in Cranbrook, Elkford, Fernie and Sparwood.
Minister Bennett helped bring that issue to the fore, Burk went on.
“Bill Bennett took a keen interest in our tax issue,” said Burk. “He understood how not maintaining the current tax rate could significantly hurt credit unions and their ability to compete, grow and lend in smaller communities across B.C.”
Bennett said the credit union decision will mean the financial institutions can continue to contribute to their communities.
“We have protected B.C. credit unions and their members in B.C. communities by shielding them from a change to federal law that would have removed the capacity of credit unions to donate to worthy causes in their communities,” said Bennett.
In all, the budget is consistent with election promises the B.C. government made, Bennett concluded.
With files from Canadian Press