Budget 2019 creates opportunities, makes life better for people

Press Release

VICTORIA – Budget 2019 is creating opportunities for all British Columbians by delivering a new B.C. Child Opportunity Benefit for kids up to the age of 18, removing interest from B.C. student loans, reducing taxes for businesses and investing in clean energy and climate solutions.

Budget 2019 makes historic investments in people and balances the budget in all three years of the fiscal plan with surpluses of $274 million in 2019-20, $287 million in 2020-21, and $585 million in 2021-22.

“People in B.C. struggled for too long because the old government made choices that helped the few at the top while everyone else fell further and further behind,” said Carole James, Minister of Finance. “Budget 2019 opens doors for you and your family by putting thousands of dollars back into your pocket. We’re helping hard-working British Columbians get ahead at every stage of their life, no matter where they’re starting from.”

To make life more affordable for families and help every child reach their full potential, Budget 2019 introduces the B.C. Child Opportunity Benefit, directly returning nearly $400 million to British Columbian families raising children, starting October 2020. For a family’s first child, the benefit is as high as $1,600 a year, increasing to $2,600 for two children and $3,400 for three children. Families will receive the B.C. Child Opportunity Benefit from the day their child is born until reaching 18 years of age.

This benefit, along with the full elimination of Medical Service Plan (MSP) premiums, will give middle-class families the largest reduction in their taxes in a generation:

• A family of four earning $60,000 will have its provincial taxes reduced by up to 60%, compared to 2016, putting more than $2,500 back into this family’s pocket.
• A family of four earning $80,000 will have its provincial taxes reduced by up to 43%, compared to 2016, putting almost $2,400 back into this family’s pocket.
• A family of four earning $100,000 will have its provincial taxes reduced by up to 22%, compared to 2016, putting almost $1,600 back into this family’s pocket.

To help make sure young people are able to start their careers without being saddled with debt, Budget 2019 eliminates interest from all new and existing British Columbia student loans. As of today, all B.C. student loans will stop accumulating interest. This means an average graduate would save $2,300 in interest, based on a $28,000 combined federal and provincial loan with a 10-year repayment period.

Budget 2019 deepens the Province’s commitment to achieving true and lasting reconciliation with Indigenous peoples, committing an estimated $3 billion over the next 25 years for the largest revenue-sharing agreement with First Nations in B.C.’s history.

This year’s budget moves forward with CleanBC by investing $902 million to make sure B.C. can meet its climate commitments and to protect the province’s clean air, land and water. This initiative was developed in consultation with the B.C. Green Party caucus as committed to in the Confidence and Supply Agreement.

“British Columbia’s economy is thriving with the strongest GDP and wage growth in Canada. It’s clear that sharing the benefits of growth with all British Columbians results in a stronger economy,” said James. “Together we are doing our part to fight climate change and build a British Columbia where everyone can enjoy a good life and secure future in the community they call home.”

To support British Columbia’s long-term economic growth, government is investing $20 billion over three years to build the infrastructure B.C. needs to thrive, creating and supporting tens of thousands of good-paying jobs.

Further, the Province is moving forward with more than $800 million in business tax reductions over the course of the fiscal plan to support investment in new plants, machinery and equipment, joining with the Government of Canada to boost B.C.’s competitiveness.

Budget 2019 continues to invest in better services for people, including improved health care, quality education and affordable, accessible child care. As priorities, government is delivering more hospitals and shorter wait times, funding schools and thousands of new teachers, and continuing the path towards a universal, made-in-B.C. child care program.

Making life more affordable

• Introducing the new B.C. Child Opportunity Benefit – starting in October 2020 – that will provide families with one child up to $1,600 per year, two children up to $2,600 and three children up to $3,400. Over the course of a child’s upbringing, families with one child will receive as much as $28,800. For families with two children, that number can exceed $40,000 in support.
• Eliminating interest on British Columbia student loans. As of Feb. 19, 2019, all B.C. student loans will stop accumulating interest; saving someone with $28,000 in combined provincial and federal student loans $2,300 over the 10-year repayment period.
• Fully eliminating MSP premiums on Jan. 1, 2020, saving families as much as $1,800 per year.
• Increasing income and disability assistance rates by an additional $50 per month, meaning a total increase of $150 per month, or $1,800 per year since Budget Update 2017.
• Investing $26 million in income and disability assistance enhancements to the B.C. Employment Assistance program to help remove barriers to accessing support, such as removing requirements that make it harder for older adults, youth and persons with mental-health issues to access the program; helping people get identification so they can access income assistance; and extending the shelter rate for those paying room and board to a family member.
• Investing $6 million annually to provide respite services for parents who provide care for children with disabilities. This will significantly reduce the waitlist for respite services and increase the respite benefit by 10%.
• Investing $85 million to support children in care by increasing support payments for foster parents, adoptive parents and extended family members caring for children and by ensuring children in care benefit from provincial tax benefits. This includes a 75% increase to support payments for the Extended Family Program and responds to recommendations from Indigenous communities and Grand Chief Ed John’s report.
• Providing funding to community organizations to operate rent banks by providing short-term loans with little to no interest to low-income tenants who can’t pay their rent due to a financial crisis.
• Introducing a homelessness action plan with a $76-million investment that will support land acquisition and services to bring the number of modular homes for people who need them to 2,200.

Delivering better services for families

• Investing $4.4 billion over three years to expand and upgrade hospitals, medical and diagnostic equipment and health information management systems to ensure patients have the quality care they deserve.
• Providing $105 million over three years to support life-saving cancer care services delivered by the BC Cancer Agency, including increasing the number of cancer-related surgeries, diagnostic imaging, PET and CT scans.
• Improving mental-health care for British Columbians with a $74-million investment that funds new initiatives focused on prevention and early intervention for children, youth and young adults.
• Increasing support by an additional $30 million, for a total of $608 million since Budget 2017 Update, to help tackle B.C.’s drug overdose crisis. This will help expand access to life-saving naloxone kits and fund pilot programs to help meet increased demand for paramedics in rural and remote areas of B.C.
• Expanding B.C.’s Fair PharmaCare program with an additional $42 million, providing coverage for more drug options that will improve the health outcomes of British Columbians. That includes people living with diabetes, asthma and hypertension.
• Providing over $550 million in additional supports for B.C.’s public education system, including $58 million over three years for the Classroom Enhancement Fund to support better classrooms for kids. This is in addition to the over 4,000 new teachers, including 1,000 special education assistants, hired to support students in B.C. classrooms.
• Moving forward with an annual investment to pilot legal clinics to help people access the legal services they need.
• Adding $111 million over three years to continue strengthening the Province’s efforts to combat and prevent wildfires.

Investing in a strong, sustainable economy that works for people

• Making more than $20 billion in capital investments primarily in the health, transportation and education sectors—the largest infrastructure investment in B.C.’s history. This will create tens of thousands of jobs in communities around B.C.
• Providing over $902 million for CleanBC, putting B.C. on the path to a cleaner, brighter, low-carbon future. This will reduce air pollution and save families money through the Clean Energy Vehicle Program, incentives for energy-saving home improvements, a net-zero building code and programs to help communities transition to cleaner energy sources.
• Diversifying forest tenures and manufacturing, increasing timber processing in B.C. and supporting collaboration with stakeholders, including Indigenous governments with a $10-million investment.
• Investing $18 million to continue making Adult Basic Education and English Language Learning free and accessible for people looking to upgrade their skills and get ahead.
• Adding $21 million to expand BC Transit and handyDART services to help people safely commute in over 30 urban and rural communities in the province.
• Providing over $39 million in new funds over three years to ensure B.C.’s bridges and roads keep people and goods moving, and an additional $4 million to improve commercial-vehicle safety by increasing inspection station hours and targeted enforcement.
• Investing $9 million over three years to implement government’s commitment to modernize the taxi industry and enable ride-hailing in B.C. This includes funding for enhanced vehicle compliance and enforcement activities, and supports the new provincial regulator, the Passenger Transportation Board.
• Providing an additional $15 million for the BC Arts Council to open doors for B.C. artists, writers and creators.
• Making a historic $20-million investment to fund a fair, independent oversight body in the mining sector.
• Providing nearly $14 million over three years to transform B.C.’s employment standards for protections and enforcement, keeping people safe at work.
• To help connect communities and businesses, government is committing $50 million to expand high-speed internet in rural and remote communities throughout B.C.

Three backgrounders follow.

Learn More:

For more details on Budget 2019, visit: www.bcbudget.ca

 

The B.C. Child Opportunity Benefit

Budget 2019 introduces the new B.C. Child Opportunity Benefit, which will provide parents up to $28,800 over a child’s upbringing to help ensure that they have the opportunities they need to thrive.

The B.C. Child Opportunity Benefit will give almost $400 million annually to approximately 290,000 families throughout British Columbia. All families earning up to $97,487 with one child under 18 and all families earning up to $114,487 with two children under 18 will receive the benefit.

Budget 2019 replaces and expands the Early Childhood Tax Benefit into the new B.C. Child Opportunity Benefit. The new benefit provides most families with substantially more annual support and is available three times longer than the previous benefit for each child.

Instead of ending at six years of age, the B.C. Child Opportunity Benefit continues up to the age of 18. The maximum annual benefit, at $1,600 for a first child, is more than double the previous maximum benefit and is designed to give more support to working- and middle-class families. The maximum benefit increases to $2,600 for two children and $3,400 for three children.

This means:

• A family earning up to $25,000 annually with one child will receive $28,800 over the child’s upbringing or $1,600 annually.
• A family earning up to $25,000 annually with two children will receive at least $46,800 over the children’s upbringing or $2,600 annually.
• A family earning between $47,500 and $80,000 annually with one child will receive $12,600 over the child’s upbringing or $700 annually.
• A family earning between $55,500 and $80,000 annually with two children will receive at least $24,840 over the children’s upbringing or $1,380 annually.

The benefit is reduced by 4% of family net income over $25,000 until it reaches $700 for the first child, $680 for the second child and $660 for each subsequent child under the age of 18. The benefit is then phased out at a rate of 4% of family net income over $80,000. The $25,000 and $80,000 thresholds will be indexed to inflation in future years.

Effective Oct. 1, 2020, parents will be eligible for the B.C. Child Opportunity Benefit when they apply for the Canada Child Benefit. Parents who are registered for the Canada Child Benefit before Sept. 30, 2020, will be automatically registered for the B.C. Child Opportunity Benefit and will receive both the new provincial benefit and the federal benefit in monthly payments.

The B.C. Child Opportunity Benefit builds on the B.C. government’s work to make life better and more affordable for families, including historic investments toward universal child care, eliminating Medical Services Plan premiums and making sure every child has access to the opportunities they deserve.

CleanBC

To put British Columbia on a path to a cleaner, better future, Budget 2019 invests $902 million over three years for CleanBC programming – making B.C. the leader in Canada in tackling climate change and protecting B.C.’s clean air, land and water.

The CleanBC programs in Budget 2019 will help B.C. achieve its target to lower carbon pollution by 18.9 megatonnes by 2030 with $354 million in operating funding, $299 million for programs in development and $26 million in capital investments to help people and businesses reduce pollution.

Additionally, Budget 2019 invests a further $223 million over three years to increase the climate action tax credit in 2019, 2020 and 2021. Effective July 1, 2019, the maximum annual climate action tax credit will be increased by 14% for adults and children, meaning low- and middle-income families of four will receive up to $400 this year. As a result of the annual increases, the climate action tax credit amounts on July 1, 2021 will be almost 70% higher than on July 1, 2017.

The B.C. government undertook consultations with the BC Green Party caucus on Budget 2019, as committed to in the Confidence and Supply Agreement. The government is particularly appreciative of the BC Green Party caucus’s partnership in the development of CleanBC and the program reflects many months of collaborative work.

CleanBC Programs

The CleanBC plan is a pathway to achieve the Province’s legislated climate targets of reducing greenhouse gas (GHG) emissions by 40% by the year 2030, based on 2007 levels.

Budget 2019 funds dozens of initiatives as part of government’s CleanBC plan to tackle climate pollution, including:

• $107 million to help British Columbians switch to cleaner transportation through point-of-sale incentives; funding for new charging stations; training and research; active transportation initiatives and a new zero-emission vehicle (ZEV) standard.
• $58 million, in addition to capital funding, to make buildings more energy efficient, including incentives for homes and businesses to install high-efficiency heating equipment and building envelope improvements.
• $18 million to work with Indigenous and remote communities to move to cleaner energy sources.
• $168 million over three years to assist large industry in reducing greenhouse gas emissions through an industrial incentive and clean industry fund to make their operations cleaner.
• $3 million over three years to support the implementation and monitoring of CleanBC by the Ministry of Environment and Climate Change Strategy.

Quick Facts:

• The investments in CleanBC will provide significant incentives and savings to British Columbians, such as:
  • Saving British Columbians up to $6,000 on the purchase of a zero-emission vehicle and approximately $1,500 per year in fuel costs by switching to electricity.
  • Providing up to $14,000 for homeowners to switch to high-efficiency heating equipment and to make building envelope improvements. People can receive $2,000 to replace a fossil fuel (oil, propane or natural gas) heating system with an electric air-source heat pump; up to $1,000 to upgrade their windows and doors to be better insulated; and up to $700 toward a high-efficiency natural gas furnace.
  • Providing a family of four up to $400 this coming year through the enhanced climate-action tax credit.

Learn More:

For more information on CleanBC, visit: https://cleanbc.gov.bc.ca/

For CleanBC highlights, visit: https://cleanbc.gov.bc.ca/app/uploads/sites/436/2018/12/CleanBC_Highlights_Report.pdf

A detailed list of Budget 2019 funding for programs to meet GHG targets follows: https://news.gov.bc.ca/files/6652_CleanBC_BudgetTable_Final.pdf

Fiscal Plan 2019-20 – 2021-22

Making Life Better

British Columbia is an economic leader in Canada. Private-sector forecasters expect B.C. to have the highest rate of gross domestic product (GDP) growth in Canada in 2019 and 2020, and B.C. has had the lowest unemployment rate in Canada for over 17 months.

B.C.’s economic success should benefit the people who make the economy work, which is why the B.C. government is choosing to invest in people, while balancing the budget. By ensuring that everyone has a chance to succeed, government is supporting a strong, sustainable economy for today and into the future.

Strong, Stable Economic Growth

The Budget 2019 forecast for B.C. real GDP growth has increased from 1.8% to 2.4% in 2019 and from 2.0% to 2.3% in 2020, compared to the First Quarterly Report 2018, with growth rates of 2.1% expected in 2021 and 2.0% in both 2022 and 2023. These changes partly reflect recent developments regarding the Canada-United States-Mexico Agreement and the final investment decision on the LNG Canada project, the single largest private sector investment in Canadian history.

This, along with other factors, resulted in the Economic Forecast Council (EFC) substantially upgrading its projections for B.C.’s economic performance in both 2019 and 2020. An average of six private-sector forecasters (a subset of the EFC) expect B.C.’s economic growth to rank at the top of provincial standings.

The main upside risks to the economic outlook include less domestic monetary policy tightening, a weaker Canadian dollar and a more resilient U.S. economy. The main downside risks include uncertainty regarding global trade policy, fiscal sustainability at ICBC and BC Hydro, weakening global economic activity, lower commodity prices, as well as ongoing economic challenges in Asia and the euro zone. To manage these risks, the Budget 2019 economic forecast is prudent compared to the Economic Forecast Council’s outlook.

Budget Outlook

Budget 2019 projects surpluses of:

• $274 million in 2019-20
• $287 million in 2020-21
• $585 million in 2021-22

The B.C. government has included several layers of prudence in the fiscal plan to help account for lower than expected revenues, unforeseen expenses or emergencies. Budget 2019 includes a forecast allowance of $500 million in 2019-20, $300 million in 2020-21, and $300 million in 2021-22. Budget 2019 also includes contingencies of $750 million in 2019-20, $400 million in 2020-21 and $400 million in 2021-22.

Revenue Outlook

Total government revenue is forecast at $59 billion in 2019-20, $60 billion in 2020-21 and $62.5 billion in 2021-22. This growth is driven by strengthening economic activity; there are no new revenue-raising tax measures in Budget 2019.

Expense Outlook

Total expenses over the three-year fiscal plan are forecast at $58.3 billion in 2019-20, $59.5 billion in 2020-21 and $61.6 billion in 2021-22.

Capital Spending

Taxpayer-supported capital spending over the fiscal plan is a record-level $20.1 billion and includes investments needed to support a strong, stable economy, such as:

• Health: $4.4 billion to support new major construction projects and upgrading of health facilities, such as the redevelopment of the Royal Columbian Hospital in New Westminster, a new patient-care tower at the Royal Inland Hospital in Kamloops and a new St. Paul’s Hospital at the Station Street site in Vancouver.
• Transportation: $6.6 billion for priority projects, such as the Pattullo Bridge replacement, the Broadway subway, four-laning on Highway 1 through Kicking Horse Canyon and the replacement of Bruhn Bridge in Sicamous.
• Education: $2.7 billion to maintain, replace, renovate or expand K-12 facilities, such as a new Northeast Elementary school in Fort St. John, a new school in Kelowna and expansion schools for Sullivan Heights Secondary in Surrey and Royal Bay Secondary in the Sooke school district.
• Post-secondary education: $3.3 billion to build capacity and help meet the province’s future workforce needs in key sectors, including a new sustainable energy engineering building at Simon Fraser University in Surrey, a new health sciences centre at Camosun College in Victoria and a renewed and expanded trades training facility at Selkirk College in Nelson.

Debt Affordability

As a result of prudent fiscal management, the B.C. government successfully eliminated British Columbia’s operating debt in the second quarter of 2018-19 and is now free of operating debt for the first time in over 40 years. This means B.C. is in one of the strongest fiscal positions in the country.

B.C.’s taxpayer-supported debt is projected to be $44 billion at the end of 2018-19 – $1.2 billion lower than projected at Budget 2018. This means the B.C. government’s borrowing costs will be lower, saving money that can be invested into making life better for the people of B.C.

The taxpayer-supported debt-to-GDP ratio, a key metric used by credit rating agencies, is expected to remain near 16% over the fiscal plan period, while funding record levels of capital spending.

Supplementary Estimates

With the elimination of the operating debt, the B.C. government is tabling supplementary estimates. For the first time in more than a decade, the B.C. government is using supplementary estimates to reinvest part of the government’s surplus into the services people need.

Highlights include $100 million for northern communities to improve infrastructure to prepare for community growth ahead of LNG development, $89 million for health research grants and $50 million for Connecting British Columbia to improve internet connectivity for Indigenous and rural communities.

Contact:

Ministry of Finance
Communications
250 387-1248

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