B.C. budget projects record-high $7.9B deficit
Credits, rebates among 'targeted, practical changes' to help middle-income people, finance minister says
The B.C. government is projecting a record-high $7.9 billion deficit next fiscal year, as the NDP prepares for a fall election by emphasizing the need to maintain spending in the midst of high inflation and a slowed global economy.
"Some look at the challenges ahead and say government should respond with deep cuts, leaving people to fend for themselves," said Finance Minister Katrine Conroy in her budget presentation to the legislature in Victoria on Thursday.
"This would only weaken the services we all rely on."
The projected deficit for 2024-25 comes on the heels of a $5.9 billion deficit projected for 2023-24. Deficits of $7.7 billion and $6.3 billion are projected for 2025-26 and 2026-27, respectively.
It means the province's debt to GDP ratio is expected to rise to 27.5 per by 2026-27, from 15.2 per cent in 2022-23.
Conroy defended the deficits by saying B.C. would be projected to have a lower debt-to-GDP ratio than Ontario, Quebec and the federal government, while acknowledging the financial strain of rising inflation and housing costs.
"We have one of the most affordable debts in the country," she said.
"As finance minister, I want you to know that when times are tough, our government has your back."
Tax credits, rebates, home-flipping tax
The government did not introduce any major new spending initiatives or programs in this year's budget, but announced a series of increases or changes to current programs. They include:
- A $248 million one-time bonus to the B.C. Family Benefit fund, which will see approximately 340,000 families receive an average of $445 more — approximately a 25 per cent increase.
- A one-time B.C. Hydro credit, saving households an average of $100 on their bill over the course of the year.
- A 10 per cent increase to the Climate Action Tax Credit.
In addition, the province will increase the payroll threshold for businesses required to pay the Employer Health Tax from $500,000 to $1 million, and increase the threshold for the First Time Homebuyers' Credit to properties costing up to $835,000, with the first $500,000 exempt from paying the property transfer tax.
"There's more to do," said Conroy. "But these targeted, practical changes will help more middle-income people."
The province also announced the details of its home-flipping tax — which will tax profits made on selling any home within 24 months of purchasing it — and providing one free cycle of in-vitro fertilization.
'We had a tough choice to make'
While taking reporters' questions Conroy was asked whether the government has a timeline to return to the surpluses the NDP had in four of their first six years in office.
Conroy did not directly answer the question, but said "over the years we will have declining deficits," and reiterated the province did not want to raise taxes or cut programs.
"We had a tough choice to make," she said.
"And I think right now that was the choice we had to make, and it was the right choice."
With an election scheduled for October, Conroy acknowledged there would likely be further spending announcements and promises.
But she rejected the notion that the budget was a pre-election document, or that the hydro rebates and increases to the B.C. Family Benefit fund was an implicit sign the campaign had already begun.
"If I did that because it was an election year, there would be a lot more [spending] in there," she said.
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