2017 Legislative Session: Sixth Session, 40th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
official report of
Debates of the Legislative Assembly
(hansard)
Tuesday, February 21, 2017
Afternoon Sitting
Volume 41, Number 12
ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)
CONTENTS | |
Page | |
Orders of the Day | |
Presentation of Estimates | 13719 |
Estimates of Sums Required for the Service of the Province | |
Hon. M. de Jong | |
Budget Debate | 13719 |
Hon. M. de Jong | |
C. James | |
Introduction and First Reading of Bills | 13729 |
Bill 8 — Budget Measures Implementation Act, 2017 | |
Hon. M. de Jong | |
Tabling Documents | 13730 |
Government’s service plans and strategic plan, 2017-18 to 2020-21 | |
Budget and fiscal plan, 2017-18 to 2019-20 | |
TUESDAY, FEBRUARY 21, 2017
The House met at 1:40 p.m.
[Madame Speaker in the chair.]
Routine Business
Madame Speaker: Good afternoon. On behalf of all members assembled, it is my absolute pleasure to welcome each and every guest to the people’s House of British Columbia. Thank you so very much for joining us.
Orders of the Day
Hon. M. de Jong: Madame Speaker, I move that this House, at its next sitting, resolve itself for this session into a committee to consider the supply to be granted to Her Majesty.
Motion approved.
Presentation of Estimates
ESTIMATES OF SUMS REQUIRED
FOR THE SERVICE OF THE PROVINCE
Hon. M. de Jong presented a message from Her Honour the Lieutenant-Governor: Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 2018, and a supplement to the estimates for the fiscal year ending March 31, 2018, recommending the same to the Legislative Assembly.
Hon. M. de Jong moved that the said message and the estimates accompanying the same be referred to the Committee of Supply.
Motion approved.
Hon. M. de Jong: I move, seconded by the hon. Premier of British Columbia, that the Speaker do now leave the chair for the House to go into Committee of Supply.
Budget Debate
Hon. M. de Jong: By way of context or perhaps even apology, I should advise the assembly that a lot of what I’m going to say this afternoon was written at the height of a raging snowstorm that descended upon B.C. earlier this month.
From my desk in my old Matsqui Prairie farmhouse, I watched the blizzard unfold. I watched the snowdrifts grow slowly and perceptively at first until my barn, my garage and eventually my parents’ house all disappeared behind a 12-foot-high wall of snow. Doors were blocked shut. We were boxed in. We were cut off.
It occurred to me that budgets and finances can take on a similar dynamic. Without a careful attention to spending levels and responsible revenue forecasting, the combined weight of deficits and debt can accumulate like a prairie snowdrift and eventually isolate an entire society from the choices it would like to make for its citizens. Digging out from beneath the storm isn’t easy. And unlike snowdrifts, budget deficits don’t eventually melt away.
This is the fifth time I’ve stood in the House to present the budget. Just like the first time, in a few short months, British Columbians will convene an electoral shareholders meeting to consider not just the merits of this budget but the progress we have made as a province under the stewardship of the government and the Premier.
When I became the Finance Minister back in the fall of 2012, the global economy was still recovering from what was probably the single biggest financial economic downturn most of us have seen. While British Columbia weathered that storm better and recovered faster than others, we were still facing a projected deficit of $1.2 billion.
Just a few months later, in the face of deeply skeptical observers, our government tabled a budget that led to a surplus of $347 million in 2013.
As a government, we promised to bring the provincial finances back into balance. We promised to repay the operating debt we borrowed to protect our core programs and services during the global economic slowdown. We didn’t promise that it would be easy. In fact, it often meant making tough choices. But we made a commitment to look to the future of British Columbia by dedicating ourselves to prudent budgeting.
We have worked to take B.C. away from the feast-or-famine budgets in favour of steady, solid growth and managed spending on the priorities of British Columbians. Back in 2013, I stood before you and said we’d eliminate the deficit and reduce the operating debt. We have done so.
Direct operating debt is now forecast to be $1.1 billion by the end of this fiscal plan period, the lowest level since 1982. That also represents a 90 percent reduction since 2013-14 and means we have more than paid back what we borrowed to finance operating deficits during those lean years. Within our reach is the possibility of eliminating our operating debt entirely for the first time in 45 years.
By any measure, we are the envy of the nation. We said we’d manage spending growth, and we have. Between 2005 and 2008, government spending was growing by approximately 6 percent per year. In 2013, we vowed to continue the work to bend the cost curve while protecting priority programs, and over the past four years, spending growth has averaged 1.8 percent. Spending
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growth is forecast to average 1.7 percent over the next three-year period.
People can have confidence in these numbers. Standard and Poor’s, when they reaffirmed B.C.’s triple-A credit rating and stable outlook last April, said: “We find B.C.’s financial disclosures transparent, comprehensive and timely. In our view, B.C.’s financial management practices are the best among the Canadian provinces.”
We promised to grow and diversify our economy, and we’ve made great progress. Back in 2013, B.C. ranked fifth among provinces, in terms of economic growth. In 2015, we led the provinces in economic growth. We’re forecast to have led again in 2016, and I believe that this constitutes the first time since the early 1960s that we have led the country in economic growth two years running.
We’ve said that we would build it, and we did. We built schools, roads, health facilities and countless other projects. These are just some of the dividends that accrued to the people of B.C., who have worked hard and continued their commitment to balanced budgets year after year.
As I tabled that budget in 2013, I said that we were standing on the brink of delivering a series of back-to-back surplus budgets. We have kept that commitment. Today I am pleased to present to the House, for the fifth consecutive year, a balanced budget.
At the conclusion of the three-year fiscal plan, if we keep our focus and our disciplined approach to managing the public’s dollars and are given that right, we will have delivered seven straight balanced budgets. A lot of careful planning and prudence has gone into achieving those budget surpluses, and I know British Columbians have worked hard to make this province as successful as it is today.
But risks remain that could threaten that success. World markets are still in flux, resource prices have not recovered, and political changes in our neighbours to the south have us cautious about making too many assumptions about the future. That’s why we’re going to stick to our plan of careful fiscal management while making measured investments to help individuals, families and communities prosper.
The dividends of prosperity are not just about new program and service investments. It’s also about making sure that British Columbians are able to keep more of their hard-earned money in their pockets. It is also about giving back.
The budgetary plan for 2017-18 anticipates total spending of $50.2 billion, total revenues of $50.8 billion, a forecast allowance of $350 million and a budget surplus, forecast at $295 million. Within the fifth consecutive balanced budget, we’re providing almost $3 billion over three years in enhanced programs and services, in addition to billions more for health care.
The budget also includes $3.1 billion over three years in competitiveness and affordability measures for families. It includes record levels of infrastructure investment, supporting more than 30,000 jobs, while maintaining enviable debt affordability metrics and continuing to be on track to eliminating the operating debt — all part of Budget 2017.
As I’ve done each year, I’ll begin by updating the current fiscal year to share with the House how we are doing since the last fiscal update in November.
Most indicators show that B.C. performed well compared to other provinces in 2016, and, as such, an average of six private sector forecasters estimate that B.C. experienced the strongest growth in real GDP among provinces last year.
Employment in B.C. was strong in 2016, growing by 3.2 percent, or 73,300 jobs. That’s the fastest annual pace this province has seen in almost 25 years.
Consumer spending was strong for the third consecutive year, and we have seen broad-based growth in every segment of the province’s retail sector. B.C. housing starts grew by 33.1 percent in 2016, reaching 41,843 units. That is significantly higher than the historical average of 29,465 units, and it does show just how strong construction activity was last year.
Happily, after a subdued first half of 2016, the value of B.C.’s international merchandise exports expanded rapidly in the second half and is 9.8 percent higher in 2016 than it was in 2015.
Some members will know, because they were there, that I met with the independent Economic Forecast Council at the end of November. As always, I’m obliged to members of both the opposition and the government caucus who did attend the Economic Forecast Council.
The forecast council is projecting growth for B.C. as follows: in 2017, 2.3 percent; 2018, 2.2 percent; and 2019-21, 2.1 percent.
For the purpose of the fiscal plan being tabled today, I can advise the House that the government is projecting B.C. economic growth in 2017 of 2.1 percent; in 2018, 2.1 percent; and in the period 2019-21, 2 percent.
Members will note that, as usual, our projections are slightly lower than the outlook provided by the council, and that is one of the levels of prudence that helps keep spending within our limits. This prudence acknowledges the downside risks to B.C.’s economic outlook, which include the potential for a slowdown in North American economic activity, uncertainty associated with U.S. fiscal and trade policy, ongoing fragility in Europe, and slower than anticipated Asian demand, particularly in China.
On the debt side, a balanced budget for the next three years with forecasted modest surpluses will help us keep our debt affordable and reduce our operating debt.
The surpluses anticipated are as follows: for ’17-18, $295 million surplus; in ’18-19, $244 million surplus; and in ’19-20, a $223 million surplus.
Successive balanced budgets mean we now have more flexibility to reduce the cost of government on taxpayers
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as well as funding priorities. We’re going to continue to pay down the operating debt, and because we’ve worked hard to pay that debt, taxpayers will save more than half a billion dollars in interest costs over the fiscal plan period.
To give you an idea, these savings — money we’re saving in terms of our interest costs — are enough to cover the $512 million we paid for the new Surrey Memorial Hospital emergency department, with enough left over to pay for the new $52 million Oak Bay High School and the Highway 99 10-mile slide project near Lillooet.
In fact, the three-year fiscal plan includes taxpayer-supported capital spending in the amount of $13.7 billion — the highest level ever — reflecting investments in roads, schools, hospitals and public safety.
And we’ll continue to save for the future through the prosperity fund. With Budget 2016, we made an inaugural commitment of $100 million and then contributed a further $400 million from the 2016-17 surplus, for a total investment of $500 million.
So what are our objectives in establishing and maintaining a firm fiscal foundation for B.C.? Because it’s not actually about bragging about our triple-A credit rating, though triple-A is important. Did I mention that we are the only province with a triple-A rating?
You know, if B.C. had the same public debt charges as a percentage of revenue, and a credit rating of most other provinces, we would be paying on average an additional $2.2 billion in annual debt-servicing costs. We don’t have to do that. So it’s important, but it is about more than ratings. It’s also about staying focused on reducing the debt load confronting our children and grandchildren and ensuring that families today feel the benefits of a strong economy.
British Columbians work hard to provide for their families, and it can be difficult to make ends meet. We’ve heard time and again that British Columbians want some help from government to make everyday life more affordable. We’ve done well in this province, and that success is due to the hard work of British Columbians, who create the businesses, work in industries and build our vibrant communities.
We believe that citizens deserve to receive some dividends from our strong economy, because they’re the ones that worked tirelessly to keep this province running through some tough times. With this budget, we are going to help British Columbians keep more of their hard-earned money. We’re going to invest in programs and services that make the province stronger, and we’re going to give a hand to those among us who need our help most.
As we give British Columbians more support, we’re going to begin with this province’s most vulnerable.
Across B.C., there is an army of dedicated women and men who work hard to provide services to our most vulnerable citizens. They spend their careers trying to connect people with the services they need most. It’s very difficult to appreciate how demanding that job must be each and every day, or I suppose even to appreciate how rewarding it must also be. So let me begin by thanking all of the dedicated professionals who work on the front lines to deliver some of our most urgent programs to those most in need of a helping hand.
Today, to help those front-line workers and our most vulnerable citizens, we’re going to provide an additional $796 million for programs that support families, individuals and children in need, including $199 million over three years to fund a further increase to disability assistance of $600 per year in additional assistance for more than 100,000 British Columbians.
In 2015, B.C. became the first province in Canada to fully exempt child support payments for families receiving income assistance, which will benefit an estimated 3,300 families this year. In 2016-17, we became only the second province to exempt employment insurance maternity and parental benefits from monthly income assistance.
Budget 2017 will build on these significant changes and further support families receiving income assistance by providing $8 million over three years to exempt additional child-related benefits, a move that will assist approximately 600 families and 1,000 children per year.
As well, funding for community living services, primarily through Community Living B.C., will increase by $135 million over this fiscal plan to continue providing support for individuals with developmental disabilities and their families.
Building on the $217 million added in Budget 2016, the Ministry of Children and Family Development will receive an additional $287 million over the next three years for B.C.’s child welfare system and supports for children, youth and their families. This includes $120 million to begin to address the recommendations of the Grand Chief Ed John report on indigenous child welfare.
By way of example, in his report, Grand Chief Ed John also recommended that we continue and expand the Parents Legal Centre pilot project, developed by the Legal Services Society, a program that provides early intervention services for families facing child protection concerns. Budget 2017 responds to this recommendation with $6 million to continue the successful legal aid services pilot projects. As well, this budget provides $8.4 million in new funding over three years to begin expanding these pilot projects, including a new Parents Legal Centre in Surrey.
To increase accessibility of child care, $20 million of that investment in 2017-18 will support the creation of up to 2,000 new, additional child care spaces. These spaces are in addition to government’s current goal of creating 13,000 new licensed child care spaces between 2014 and 2020, announced as part of the B.C. early-years strategy.
As a society, we must do what we can to support those
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who need it most, and these measured investments will help do that for many British Columbians in need.
Madame Speaker, over the years, I’ve occasionally been asked what I think is the single most important service government operates or funds, and there are certainly many. Support for the disadvantaged and vulnerable, health care, public safety, environmental protection — of course, they are all crucially important. But if I had to pick one, it would be education, because education is about empowering the individual. It’s about providing a young person with the tools for a lifetime. And we know this: on average, the better trained and educated a person is, the healthier they will be, because they will make better decisions for themselves and their family.
It starts with your first days of school, when you begin to learn the fundamentals and receive your first glimpse into what education can do for you. Education opens our minds. It expands our immediate world into the endless array of ideas the world has to offer. And of course, it opens the door to a wealth of opportunities that can lead students into a bright future.
In 2013, the Education budget was $5.4 billion, and in this year’s budget, we are going to be investing a record $5.9 billion. In fact, since I moved over to this side of the House back in 2001, the per-student funding to school districts has increased by almost 50 percent, rising from $6,262 to now almost $9,000 per student for 2016-17.
Overall, this fiscal plan will provide an additional $740 million over three years to the Education budget. A portion of those additional funds will allow us to continue addressing pressures facing rural schools and families who rely on busing to get their children to school.
In rural areas, schools are the centre of the community. Keeping rural schools open was a concern I heard from Krista in Kaleden, just south of Penticton, during the budget town hall discussions we had last month. I told Krista that I grew up on a farm and attended the last one-room school in the district I lived in, so I have some firsthand knowledge about the importance and influence rural schools can have on a child’s future.
And for Krista and all other British Columbians who are concerned about rural schools, I can say that this year government invested almost $2 million to help keep rural schools open. Budget 2017 is going to see another $9 million invested over three years to the rural education enhancement fund, which will help maintain these important education and community hubs in our rural areas.
We also know that in both rural and urban communities, just getting children to school can be a challenge and a significant cost for busy, hard-working moms and dads. In an effort to make life just a little bit more affordable to parents while providing safe and efficient bus services, Budget 2017 confirms an additional $45 million over the next three years to eliminate fees and ensure virtually no one has to pay for school busing services.
Also, within that $740 million for the education budget, we’re providing $228 million to fund enrolment growth in B.C. schools, funding for K-to-12 salary costs and $320 million over three years while we work to conclude a final agreement with the BCTF on class size and composition. Negotiations are ongoing, and we will continue to bargain to ensure stability continues in the education system. I want to emphasize that any additional costs that are required will be accommodated within the fiscal plan.
This budget also includes $2 billion — $2 billion, Madame Speaker — in capital spending over the next three years for schools. This includes addressing significant enrolment growth in Surrey, with $217 million for up to 5,200 new student seats in Surrey alone.
For most students, acquiring the tools they will need to succeed and prosper will take them from our K-to-12 school system to one of our world-class post-secondary institutions. Whether they are dreaming of becoming an electrical engineer or an electrical contractor, an urban transit design specialist or a certified automotive mechanic, our objective remains the same — that every young person, irrespective of their family’s financial circumstances, should have the opportunity to make their dream a reality by having access to the vocational institution, college or university that will provide them with the education and skills training they require.
That was our intent back in 2007, when we announced that we would be providing $1,000 for B.C. children to use toward their education. In 2013, I announced that we were increasing that amount to $1,200 through the B.C. training and education savings grant program. Last year we extended that commitment to children born in 2006. Many parents have jumped at the chance to begin saving, and the first recipients of that 2007 commitment are now only six years away from accessing their funds for their training.
I have to say that on the whole, only about two-thirds of eligible children have RESPs to take advantage of this opportunity. This program is a real boost to the future, and it’s our hope that in continuing it, more parents will take advantage of this program to help ease their children’s path.
For those students who have to supplement those savings with student loans, there comes a time when studies are complete and the loan that society provides interest- and payment-free while the student is in school needs to be repaid. In Budget 2017, we’re going to help make that process a little easier by lowering the interest rate on student loans from prime plus 2.5 percent to just prime, effective August 1, 2017.
By way of example, with prime at 2.7 right now, those in repayment would have to pay 5.2 percent today. After August 1, they will just pay that prime amount. This measure will save people in repayment collectively $11.3 million this year and $17 million in each of the next two years.
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In this wired world in which we live, we have to make sure our post-secondary institutions are up to the task. That’s why Budget 2017 provides almost $3 million annually over three years to allow B.C. post-secondary institutions to transition their sites to the BCNET Advanced Network. It means institutions in areas across B.C. will have more secure, faster connectivity and will improve interconnections with other institutions across the province.
Budget 2017 also includes $2.6 billion in capital spending by post-secondary institutions for new buildings and renewal of infrastructure at campuses across the province. That includes $71.2 million of capital investments on rural campuses, including North Island College in Campbell River, Northwest Community College in Terrace, Northern Lights College in Dawson Creek and Okanagan College’s Vernon campus.
In the time that I have occupied a seat in this chamber, we have seen the budget for health care increase from $6.4 billion in 1994 to just shy of $20 billion by the end of this fiscal plan. We spend a lot on health care, and we should. We have a growing population and demographic shifts that also mean we have an aging population.
All of these factors mean increased pressures on our health care system, and we need to rise to the challenge of meeting those pressures. But it’s not easy, and it’s certainly not free. This year, government will devote 41 percent of its budget to health care. In fact, according to the Canadian Institute for Health Information, B.C. spends $4,050 per person each year on health care and is the third most efficient of all the provinces.
Capital spending on infrastructure in the health sector will total $2.7 billion over the next three years for new major construction projects and upgrading of health facilities, including medical and diagnostic equipment, operating rooms and information management technology systems. That includes the $417 million Royal Inland Hospital patient tower in Kamloops, two new hospitals on Vancouver Island — one in Courtenay-Comox and one in Campbell River — and a new patient care tower, including a surgical services centre, at Penticton Regional Hospital. Budget 2017 also confirms our commitment to ongoing funding for Canuck Place Children’s Hospice.
It has also never been clearer that mental health challenges, which are inextricably linked with addiction issues, require more resources. The evidence indicates that if problems can be addressed in the earlier years of our lives, there is a greater likelihood of avoiding the negative consequences later on.
Therefore, this budget adds $165 million that will go primarily for youth mental health needs and to address associated substance use issues, including $45 million for the Ministry of Children and Families to provide resources to allow for more mental health counselling and treatment for children; $12 million for the Ministry of Health to provide up to 28 highly specialized addiction treatment beds for youth; $5 million in start-up costs for the new B.C. Centre on Substance Use, headed up by the respected Dr. Evan Wood, which includes an additional $2 million annually for operating costs, largely for clinical research in support of evidence-based addiction treatments; $10 million in 2017-18 to reduce wait-lists for substance use treatment services incremental to those provided by the health authorities; and $65 million over two years for the acquisition and renovation of buildings to house some of our most vulnerable, including those with mental health and substance use issues.
In addition to all of this, we’ve now secured an agreement with the federal government to invest an additional $1.4 billion over the next ten years to improve home care and to support mental health initiatives. That amount is not reflected in the budget presently but will be included in the next budget update.
We have to strike a balance. We have to continue funding this growing health care system, but we also need to do it in a way that helps make life more affordable for British Columbians. That is where we come to the power of fiscal balance and the advantages of budgetary surplus.
We’ve had a conversation in B.C. that can’t be had virtually anywhere else in Canada — what to do with that surplus. For a few, the answer is simply to spend more. Many more people, however, offer this analysis. They say: “We’re glad you’re balancing our budget, but if you’re posting regular surpluses, maybe it’s because you’re taking just a little too much money from us. We don’t want you to grow government. We want you to give us some of our money back or leave it with us in the first place.”
That is an approach we intend to take with Budget 2017. It’s a principle our government acted upon boldly in 2001 with a 25 percent personal income tax cut. It’s a principle we endorsed in 2005 with the B.C. tax reduction credit and in 2007 with a 10 percent income tax cut. It’s the principle behind the revenue neutral carbon tax, vigorously opposed by some members of this assembly, which since 2008 has allowed for personal income tax cuts, general corporate and small business income tax cuts and other personal and business tax measures that have made life a little more affordable and B.C. a little more competitive and attractive to new jobs and investment.
It’s an approach that allows us to state with pride that British Columbians earning $125,000 per year or less pay the lowest provincial personal income tax anywhere in Canada. If they were in Ontario, they would pay $2,819 per year more. If they were in Quebec, they would pay $8,645 more. Mon Dieu.
But you know, each time I repeat that fact, or each time it is written, commentators feel compelled to attach a footnote. They point out, correctly, that unlike those provinces and others, B.C. continues to collect a separate mandatory fee for medical services premiums. For an
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individual earning $42,000 or more, the cost is presently $75 per month, $900 per year. For a family, depending on income, it doubles to a maximum of $1,800 per year.
In recognizing the burden this represents for many middle-income families, we have endeavoured to provide some relief. Today, as a result of improvements that were made in last year’s budget, approximately 40 percent of B.C.’s families are paying reduced MSP premiums or no premiums at all. In fact, now that MSP premiums no longer apply to children, an estimated two million British Columbians currently pay no premiums whatsoever.
However, with Budget 2017, we intend to go further. Today I can announce government’s intention to move towards the complete elimination of MSP premiums in British Columbia. We are taking the first significant step, not by raising taxes elsewhere but by drawing upon the benefits of having Canada’s strongest economy and the budgetary surpluses that we have achieved.
As a first step, starting this fiscal year, on January 1, 2018, we’re going to roll back most premiums to about the levels they were at and set in 1993. We’re going to cut premiums in half for families and individuals with family net income of up to $120,000 per year. For a family paying full premiums, this represents a saving of $900 per year.
As a result, in addition to the estimated two million people who pay no premiums, a further two million British Columbians will see their premiums cut in half. A single parent earning up to $40,000, with two children, will see their monthly premium drop from $46 to $23. A family earning less than $35,000, with two children, won’t pay any premiums at all.
As I indicated, this represents a first step. While those earning above $120,000 will continue to pay premiums at the current frozen rate, our objective over time is to completely eliminate MSP as an expense for British Columbians. Timing and the structure of that next step will depend on the province’s fiscal capacity in the future.
Drawing on the dividend afforded by our leading economy, we can leave more money in the pockets of B.C. families and ensure that we have a health care system that is there when people need it and provides the quality of service that British Columbians expect.
When you ask British Columbians about the cost of living pressures they face, many will immediately focus on the cost of housing. This is certainly the case in certain parts of B.C. The problems with housing affordability and availability aren’t easy to resolve, but there are some levers that government can use to help ease things. We can help make things a little easier for current homeowners, and we can help more people enter the market. We’ve done that.
But I’ve cautioned before, and I’ll say it again. We can’t just focus on getting more people into the market. On its own, without adding to supply, that’s just going to drive prices higher. And it won’t help those who, by choice or necessity, are seeking rental housing.
The key to improving housing affordability over the longer term is to create new supply. This government’s housing action plan includes a number of measures designed to stimulate new housing supply, assist buyers, invest in affordable housing and improve our understanding of what drives growth in B.C.’s real estate sector.
That’s why we committed, over this past year, $920 million to support the creation of almost 5,300 new units of affordable housing to help a wide variety of people across the province. Along with the B.C. home partnership program, which helps an estimated 42,000 B.C. households enter the market for the first time, this represents the single largest direct investment in housing affordability in the history of British Columbia.
This will complement other actions we’ve taken, such as the introduction last year of a newly built home exemption to the property transfer tax, which has helped nearly 5,500 families save an average of $7,600. In Budget 2017, we are going further and raising the threshold of the first-time-homebuyers program exemption to $500,000, saving first-time homebuyers up to $8,000 on their first purchase.
In the coming year, the government will also explore and implement opportunities to partner and invest with local governments to help ensure cities and municipalities have the capacity, incentives and performance targets needed to expedite the processing, approvals and permitting of housing development applications.
Homes must be available to British Columbians, and they must be affordable, but they must also be accessible. We are resolved to increase the accessibility of homes and public buildings for all British Columbians. That’s why we intend to enter into a partnership with the Rick Hansen Foundation to develop an accessibility certification program which will rate, recognize and promote accessibility in our built environment.
Just as B.C. has become a leading innovator in environmental building design, thanks to our application of the LEED program, we are also seeking to become an innovator and leading example of building designs that ensure all citizens are able to access buildings to the fullest extent throughout their lives.
Finally, on the issue of housing, I would say this. We should remember that the pressures we have seen develop in the housing market are a direct result of the growing demand by people to live here. British Columbians want to stay here, and other Canadians want to come here. They want to stay here and they want to come here because they see hope, promise and opportunity unmatched anywhere else in Canada.
We’ve worked hard with British Columbians to build a strong economy, one that provides jobs and opportunities for our citizens. We’ve done that work because a strong economy is the foundation upon which we can
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build everything else, and we’ve done well. For the first time in over half a century, we can boast of having led the country in economic growth for two years running.
I always urge caution when we’re speaking about the economy, because, as I said earlier, we can’t forget that there continue to be risks that could erode our strong economic position. We need to ensure our tax structure remains competitive to promote continued investment and job creation and not ignore changes that are implemented elsewhere by jurisdictions that compete with us for investment. We need to acknowledge we live in a world where economies continue to be fragile and unpredictable.
And of course, something we’ve been hearing a great deal about in the news lately, we need to recognize and resolutely confront the protectionist winds gathering force globally and, more particularly, to our immediate south with our largest trading partner.
We have a diverse economy and a diverse portfolio of customers, not just in Canada and North America but around the world. It’s something we’ve applied ourselves to purposely and in partnership with the private sector.
Back in 2001, 70 percent of our merchandise exports went to the United States. Today, as a result of developing new products and new markets, that number has reduced to 54 percent. Compare that to Ontario at 81 percent or Alberta at 86 percent. But make no mistake, the U.S. remains our largest single trading partner, and any interruption in that trade will impact us. Our successful efforts at diversification won’t completely insulate us from these protectionist tendencies, but they will certainly help.
Diversified markets will help us ensure the continued success of our cornerstone forest industry. More than 140 communities in B.C. rely upon our forest sector, and those communities have led the way in trade diversification. Between 2003 and 2016, we have seen more than a 2,000 percent increase in B.C. softwood lumber exports to China.
Today’s budget includes the resources necessary to continue expanding our markets in Asia and India for our forest products, ensuring that we will not be as vulnerable as we were 15 years ago, the last time we saw this sad protectionist movie.
In addition to this work, let me assure the House that the forces of protectionism shall not go unchallenged. In 2016, B.C. accounted for 61 percent of Canada’s $7.5 billion softwood lumber trade with the U.S. That’s why the Premier and the government will continue to work closely with Prime Minister Trudeau and Global Affairs Minister Freeland. That’s why we’ve emphasized our belief that as a trade issue this should be number one in terms of priorities, and that’s why we’ve appointed David Emerson as B.C.’s special envoy on the softwood lumber issue.
I’ve noticed something about this free trade versus protectionism debate. Those of us who actually oppose trade barriers and support agreements like NAFTA tend to talk about the advantage of free trade exclusively from the perspective of Canada, and in our case, of course, British Columbia.
What’s often overlooked is that there are millions of Americans who rely upon trade with Canada for their jobs. Though it’s not our job to speak on their behalf, perhaps it’s time someone did. Perhaps it’s time someone pointed out the price they will pay, that small-town America will pay, if barriers are erected at our border. Never mind the price American consumers will pay — people who want to buy their own homes, when the price of those homes goes up because of tariffs and barriers placed on the products needed to build those homes.
We in B.C. have a role to play, and we will continue to work with state governments in the Pacific Northwest to build ties and positive constructive relationships across our border. It was that longstanding goodwill that led to B.C. and Alaska signing a statement of cooperation on the protection of transboundary waters, to protect and enhance the shared environment for the benefit of both jurisdictions.
We will need to draw on all of that goodwill if we are to successfully negotiate an extension to the Columbia River Treaty, the transboundary water management agreement between the United States and Canada. Under this agreement, we’re working together to improve flood management and power generation for the Columbia River and Kootenay River on both sides of the border. That agreement has generated — pardon the pun — benefits on both sides of the border and is a shining example of what can be accomplished when our discussions and negotiation are guided by fairness and mutual respect.
So we’re going to keep working to fortify relationships with our neighbours to the south, despite some of the rhetoric we’re currently hearing, but we will also continue to seek out new markets. As a province, we have worked hard to diversify our markets, and in doing that we strengthen ties with countries such as China, Malaysia, Indonesia, Philippines, India and Japan. Promoting trade and investment is critical to growing our economy in B.C. and creating the jobs that British Columbians depend upon.
There is a tremendous amount of potential to attract investment across the globe, and we are beginning to see some of the real benefits of these relationships. In fact, we’re opening our third trade and investment representative office in Southeast Asia. Our new office in Johor, Malaysia, right next door to Singapore, will work alongside our offices in Manila, Philippines, and Jakarta, Indonesia, to take advantage of the growing business opportunities in the region. Budget 2017 provides $1.7 million annually to support the operations of these offices.
As a priority initiative for 2017, we are intending to enter into a partnership with the Vancouver Board of Trade that will include financial support for a unique trade acceleration program to help build B.C.’s export capacity by training small and medium-sized enterprises across B.C. to better access export markets.
While we actively pursue those new markets abroad, we are going to do what we can here at home to ensure that our businesses are competitive. When we conducted the Commission on Tax Competitiveness, one of the areas we heard a lot about was the provincial sales tax charged on electricity. Here’s what three prominent leaders of B.C. trade unions had to say: “Put simply, charging the PST on electricity is an outdated and uncompetitive tax measure that should be removed in the 2017 provincial budget when it is delivered in February.”
We take these comments and the results of the commission’s work seriously, because we want to ensure B.C.’s businesses, large and small, are able to compete, and we also want to encourage businesses to use clean, renewable hydroelectricity over more carbon-intensive fuels.
Starting on October 1, 2017, we are going to phase out the PST on electricity, starting with a reduction of 3.5 percent of the purchase price and moving to a full exemption on April 1, 2019. Government will forgo more than $160 million in revenue, money that will now be available to businesses for reinvestment, expansion and job creation.
Finally, Budget 2017 will forgo $213 million in revenue over three years to reduce the small business tax rate from 2.5 percent to 2 percent, effective April 1, 2017, which means that B.C. will have the second-lowest small business tax rate in the country.
By growing the talent and business resources in all parts of British Columbia, we all succeed. Our rural economies and the economic activity they support are a huge part of what makes this province such a powerful economic engine. It’s important to us, which is why this government works hard to support vibrant and healthy rural communities that attract businesses and individuals.
Budget 2017 will add to this work with the following: further funding to support our goal of 100 percent high-speed Internet connectivity for all British Columbians before 2021; funding to continue the B.C. rural dividend program into 2019-20, to help reinvigorate and diversify rural communities with populations of less than 25,000; providing a $3,000 tax credit for volunteer firefighters and search and rescue volunteers as a way to acknowledge and give back to this vital source of community safety; and providing an additional $5 million every year to the community gaming grant program, bringing the annual total to $140 million to support not-for-profit organizations in the services they provide to enrich communities throughout B.C.
To help keep both urban and rural communities safe, we will invest an additional $23 million over the next three years for the province’s expanded guns and gangs strategy and community safety initiatives. This will continue funding for two additional anti-gang police units and dedicated prosecutors to prioritize cases linked to gangs and organized crime.
Over the last five years, B.C. has achieved nearly 400 economic agreements with First Nations. These agreements brought $63 million in benefits to those communities in the last year alone. We’re proud of these economic agreements, not just because First Nations communities are foundational and not just because they benefit so many of these communities; we’re also proud of these agreements because as First Nations benefit and see success, we all achieve success.
As our economy grows and our population ages, we need to ensure that young aboriginal British Columbians have access to the same educational training and employment opportunities as every other British Columbian. Accordingly, Budget 2017 provides additional resources to the Ministry of Aboriginal Relations and Reconciliation and other ministries to facilitate this work and ensure that the benefits of a strong economy are shared with all communities and all citizens, including B.C.’s First Peoples.
We do so not just because it’s the right thing to do, but because now, more than ever, it’s essential if our province and our country are to achieve our full potential.
The diversification of our domestic economy has contributed greatly to our economic strength. To promote continued growth in exciting new areas, Budget 2017 includes funding for strategic investments in priority sectors.
B.C.’s aerospace sector is growing and now generates about $2.5 billion in revenue annually and employs almost 9,000 British Columbians. Budget 2017 continues the $5 million over five years funding commitment, announced first in Budget 2014, to develop and grow B.C.’s aerospace industry in partnership with the Aerospace Industries Association of Canada Pacific branch.
Budget 2017 also includes ongoing funding to maintain and grow our partnership with the Vancouver International Maritime Centre as we seek to draw more shipping companies and their head offices to Vancouver, creating long-term, high-paying jobs while further building that gateway between North America and Asia.
Effective for 2017 and subsequent years, the budget for the small business venture capital tax credit will increase from $35 million to $38.5 million. This will allow for up to $11.7 million in additional equity financing for qualifying corporations annually.
One mustn’t forget the B.C. tech sector, which has seen growth for the sixth year in a row, employs more than 100,000 British Columbians and contributed $14.1 billion to B.C.’s overall economic output in 2015 alone. Last year this government launched the B.C. tech strat-
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egy. It’s a strategy that will continue to help grow this vibrant sector, and Budget 2017 adds an additional $87 million toward B.C.’s tech strategy. Specific details on how that money will be allocated will be released at the Tech Summit in March.
We will be extending and enhancing sector tax credits for scientific research and experimental development, venture capital to support innovation, commercialization and the tech sector generally.
Developing this province isn’t just about using our resources wisely to boost our economy. It’s about protecting those resources and ensuring that this province’s natural beauty is protected for future generations.
There is something uniquely British Columbian about the relationship we have with this super, natural province we call home. We all benefit from the beauty of this province and from our world-renowned provincial park system. And as we benefit today, we are also going to make sure future generations are equally able to enjoy the beauty these parks have to offer.
That’s why Budget 2017 adds $26 million over three years of base funding for the B.C. Parks future strategy. In this strategy, government will be adding new park rangers throughout the province — with a particular focus on protecting and preserving the back country — new programs to promote and protect the environment and more than 1,900 new campsites to help meet that growing demand.
This budget also provides funding of $9 million over three years to the Ministry of Forests, Lands and Natural Resource Operations to support the implementation of the forest carbon initiative, a suite of activities under B.C.’s climate leadership plan designed to reduce carbon emissions in the forest sector and capture carbon through the restoration of damaged forests.
This is in addition to enhanced reforestation work and the one-time funding of $150 million provided to the Forest Enhancement Society of British Columbia to support forest rehabilitation initiatives.
Woodland caribou populations across B.C. continue to decline. In support of the ongoing efforts to help this vulnerable population of ungulates, and particularly to protect critical habitats of woodland caribou, Budget 2017 includes $27 million to support and enhance the provincial caribou recovery program to ensure caribou maintain self-sustaining populations.
As we speak of supporting the welfare of animals, let’s also recognize the hard work done by the BCSPCA to support animals in this province. The BCSPCA provides vital services for animal welfare, and as a government, we recognize the value of that work. That’s why I can confirm an additional $5 million in funding to support the BCSPCA’s eight-year facilities development plan to replace or renovate aging shelters keeping vulnerable animals safe.
It was not that long ago that the world descended into recessionary chaos. And while others continue to struggle, we in B.C. have come such a long way and have accomplished so much to be proud of. It takes a lot of hard work to dig yourself out after a storm and find your path forward again, but we’ve done it. And it’s worth it.
Re-establishing ourselves as Canada’s economic leader with the strongest fiscal position is worth it because it means choices. Choices that other parts of Canada don’t have and won’t have for years or even decades.
The choice to fund the services our citizens depend upon without running deficits for our children and grandchildren to inherit. The choice to invest in schools, hospitals, highways at record levels. And remarkably, the ability to accomplish both of those objectives and still make the choice to leave B.C. families with significantly more money in their pockets to make their own choices.
Madame Speaker, this really is the people’s budget made possible by the people’s hard work and the people’s belief in our province. And if it is true that we have always been the envy of the nation for our geographic splendour and meteorological advantages, then it is equally true that today we are the fiscal and the economic envy of every province in Canada. You can hear the call across Canada: “Go west, young lady; go west, young man” — to B.C., where the determination, ingenuity and talents of British Columbians have built a remarkable story and where the future has never looked brighter.
C. James: Madame Speaker, I am pleased to rise and respond to Budget 2017.
We know, and the public knows, that the 16-year record of this Premier and this government shows that they have not been working for everyday British Columbians; in fact, just the opposite. And Budget 2017 makes that perfectly clear.
Now that it’s election time, the government is singularly focused on having you forget everything that they have ever done. They’re hoping that you’re going to forget the families, children, seniors and so many people that have had a very tough five years under this Premier and a very tough decade and a half under a B.C. Liberal government.
Stagnant wages. Homes no one can afford. A hike to virtually every fee, fare and rate the Premier can get her hands on. That’s the economy that the people of British Columbia know.
The Premier’s transparent attempt to try and have you forget their 16-year record is not going to fool anyone. Low- and middle-income families deserve far more than this partial MSP reduction and a few other half measures.
The Premier will want you to forget that since she’s been Premier, she has added $1,000 more to the family budget simply from her hydro, ICBC and MSP rate hikes.
The Premier wants you to forget that this partial MSP reduction is virtually the same amount that the Premier increased over the last number of years.
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No relief from her hydro and ICBC increases, and those are about to go up even more — by about $100 more per year.
The surplus in this budget, Madame Speaker, is on the backs of hard-working British Columbians, on the backs of all of the fees and services the public has had to pay, seniors and the most vulnerable who have been ignored by this government.
The unexpected surplus that built over this last year is in large part due to a property tax windfall, from home prices skyrocketing far beyond the reach of most families. Those home prices skyrocketed because, after the alarm was sounded by the New Democrats, by homeowners and even by the B.C. Chamber of Commerce and the speculation was pricing families out of the market, the Premier refused to act. She didn’t side with hard-working families. She refused to step in.
As home prices skyrocketed, rental vacancies plummeted, which made rental costs also spike upward. Good luck trying to find a place to rent, and when you do find a place to rent, be prepared to pay more than your budget will allow. On top of this, in this budget, the residential tenancy branch budget is cut, which means even longer wait-lists. And by the way, when you’re there, you’ll pay double under this Premier. The real economy for most British Columbians is that they can’t afford a place to live.
This Premier and this government want you to forget that seniors haven’t been getting the care they deserve. Ninety-one percent of care homes don’t meet the basic standards of care for our seniors because they’ve dropped staffing levels to alarming rates. The Premier hopes that you’ll forget that she took away bus passes for people with disabilities. She wants you to forget they starved services for youth with mental health and addictions, starved supports for youth in care and waged a war on public education, instead of properly supporting it. Now, thankfully, the courts seem to have put an end to this government’s tactics of picking a fight with teachers but not before an entire generation of children were hurt by the cuts they imposed.
It doesn’t end there. Instead of working for people, this government has caused longer wait-lists for emergency rooms across British Columbia, and so many people have no hope of finding a family doctor. Instead of working for people, this government has caused tent cities and neighbourhoods across this province, as more than 15,000 people sit on wait-lists to access supportive housing. And that wait-list has been steadily growing as the Premier lets the housing affordability crisis get worse. Instead of working for people, this government has doubled tuition for post-secondary education in British Columbia, if you can even find a spot for the program that you need.
Instead of working for people, this government has caused massive increases to hydro bills every month. People ask themselves why it is so much higher than last year when that bill comes, because they are understandably confused. They heard the Premier and the government before the last election tell people that hydro hikes weren’t on the way and that, in fact, they might not even go up. But, of course, we all know how that ended, after the last election. Even worse, a massive uncovered debt at B.C. Hydro means rates are set to increase even more than the already scheduled increases.
ICBC rates are also going up and have been increased already. Ferry fares, park fees, child care, tuition. And, of course, the unfair medical service premiums have been raised over and over and over again under this government. If the Premier can jack up the cost, she has. Meanwhile, this government has raided money from B.C. Hydro and ICBC to pad their budget. In some years, the increases alone to these hidden taxes have made up the entirety of the surplus.
To put it simply, while this government works hard for people at the top, you pay more for absolutely everything. Also, the Premier and her government can look at each other and say how great everything is. Well, people aren’t going to forget that record, not when it’s been so tough for families under this Premier and this government.
Costs go way up, and wages stay stagnant. In fact, B.C. has the second-lowest wage growth across Canada. Flat wages are holding people back in B.C., and what stands in their way is this government, keeping minimum wage below the poverty line.
It isn’t surprising, when you look at the statistics, that 53 percent of British Columbians are living paycheque to paycheque, according to the Canadian Payroll Association, and that most British Columbians can’t save any money. They have to spend most or all of their take-home pay every payday. That’s according to an MNP consumer debt survey.
Roughly 50 percent of British Columbians said that they’re within $200 of being unable to pay their bills. Let’s pause to just think about that for a moment. Between the already scheduled increases to hydro and the looming increases associated with the unexpected $1 billion debt discovered at the utility, that $200, that small bit of elbow room, could be completely gone, and then what? How does a family decide what goes first? School supplies? Clothes? Heat for the home? Fresh food?
Under this government, B.C. has shifted faster than any other province towards an economy of low-wage jobs. A recent CIBC report showed that there has been virtually no growth in the number of high-wage jobs for many years. That doesn’t sustain families, that doesn’t sustain communities, and that’s certainly not working for people.
We’ll all remember, last election, that the jobs this Premier talked about never materialized. In fact, I’ve heard this Premier say it was aspirational. Well, it isn’t aspirational when you deliver zero. Instead, this Premier made you pay thousands more.
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The Premier said the reason she made everyone fork over thousands of dollars year after year was because we all needed to tighten our belts. We all needed to pitch in. Well, we know that the Premier wasn’t tightening her belt. The really rich didn’t have to tighten their belts.
I heard the Finance Minister talk about choices. This Premier, this government, this Finance Minister made a choice to give a $1 billion tax break to the wealthiest 2 percent at the time everyone else was told to tighten their belts. The punchline was that no one even asked for it. It was a gift from this Premier that everyone else paid for with increases to MSP premiums. They know who this Premier works for. The Premier knows who she works for. No one needs to ask.
Let’s be perfectly clear. There’s only one reason that we’re seeing the Premier try and make you forget her record. That’s because the election is three months away, she’s been getting a few bad headlines, and the people can see who she really cares about. It’s no surprise that the Premier will be trying to erase the last five years of neglect and broken services. Whatever she does now with this budget, who she really works for and what she really cares about haven’t changed at all. The only people who miraculously seem to avoid neglect are the wealthy and the well-connected.
The Premier hopes the bad headlines will go away. She hopes you’ll forget how tough things have been for your family, how tight the family budget is. The Premier hopes you’ll forget how much less you got from schools, hospitals, seniors care and other services that you care so much about.
The Premier wants you to forget that we’ve gone from second-best- to second-worst-funded education system in this country. She hopes you’ll forget that 315 schools have been closed in this province. The Premier hopes you’ll forget that there are children who went through their entire education without any support for special needs, without any teacher-librarians, without any counsellors. The Premier hopes you will forget that children in care like Alex Gervais and so many others went through their entire lives without the support they needed just to survive.
We will not forget. The public will not forget.
The Premier hopes you’ll forget about how much more you’ve had to pay for everything, from housing to hydro to health care. She hopes you’ll forget that people on fixed incomes — like seniors, those on income assistance and those on disability — continue, under this Premier and this government, to struggle.
The Premier will be out selling her forget-everything budget without a care in the world, but on this side of the House, we will treat British Columbians with more respect. We know this budget won’t fool people.
We believe this budget doesn’t hide what people already know: an economy that’s all about fee and fare hikes, stagnant wages, cuts to services, paying more and getting less, homes priced out of reach. That’s not working for B.C. families. It doesn’t work for people to starve our schools and hospitals for years and then pretend you care at election time. It’s bad for people, and it’s bad for the bottom line.
Quite literally, families in British Columbia cannot afford more of this Premier and this government. There is a better way. It’s time to make government work for you again. That’s why we’ll make life affordable for everyday families, instead of driving up your costs with higher fees. That’s why we’ll fix the services you care about, like our schools and seniors care, and stop the cuts that have hurt too many people. That’s why we’ll build a sustainable economy with good jobs for more people everywhere in British Columbia.
I’ll have much more to say about this budget at the next sitting. I reserve my place to continue in the debate.
C. James moved adjournment of debate.
Motion approved.
Introduction and
First Reading of Bills
BILL 8 — BUDGET MEASURES
IMPLEMENTATION ACT, 2017
Hon. M. de Jong presented a message from Her Honour the Lieutenant-Governor: a bill intituled Budget Measures Implementation Act, 2017.
Hon. M. de Jong: I move first reading of Bill 8.
Motion approved.
Hon. M. de Jong: Bill 8 consists of a number of provisions that amend six statutes in order to implement many of the tax measures in Budget 2017. The Income Tax Act is amended to provide two new tax credits — the B.C. back-to-school tax credit and the volunteer firefighter or search and rescue volunteer tax credit.
The amendments to the Income Tax Act also reduce the small business corporate income tax rate to 2 percent from 2.5 percent and decrease the tax credit rate for ineligible dividends accordingly.
The Income Tax Act is also amended to expand, extend or clarify several tax credits. The scientific research and experimental development tax credit is extended for five years. The book publishing tax credit is extended for two years. The training tax credits are extended for three years.
The mining flow-through share tax credit is extended for one year. The mining exploration tax credit is expanded to include costs incurred for environmental studies and community consultations.
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The interactive digital media tax credit is expanded to augmented reality and virtual reality products designed to entertain. The interactive digital media tax credit’s restriction against eligible business corporations participating in the small business venture program is removed. The interactive digital media tax credit’s principal business requirement is relaxed.
The phase-out of preferential tax treatment for credit unions is paused, and the education tax credit is eliminated effective for the 2018 taxation year.
The Income Tax Act is also amended to provide administrators with access to the B.C. Assessment information and to facilitate information-sharing for the purpose of administrating the Home Owner Grant Act.
The Home Owner Grant Act is also amended to facilitate information-sharing for the purpose of administering the Income Tax Act.
The Property Transfer Tax Act is amended to increase the first-time-homebuyers’ threshold to $500,000. The Provincial Sales Tax Act is amended to phase out the tax on electricity. The tax rate will be reduced to 3.5 percent on October 1, 2017, and electricity will be fully exempt on April 1, 2019.
The Tobacco Tax Act is amended effective October 1, 2017, to increase the tax rate on cigarettes to $49.40, from $47.80, per carton of 200 cigarettes and to increase the tax rate on loose tobacco to 24.7 cents, from 23.9 cents, per gram.
Finally, the Motor Fuel Tax Act is amended effective October 1 to exempt natural gas from the motor fuel tax on locomotive fuel.
I move that Bill 8 be placed on the orders of the day for second reading at the next sitting of the House after today.
Bill 8, Budget Measures Implementation Act, 2017, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Tabling Documents
Hon. M. de Jong: I have the pleasure to rise to table the government’s overall strategic plan and the Budget and Fiscal Plan, 2017-18–2019-20, which together fulfil the requirements of sections 7 and 12 of the Budget Transparency and Accountability Act.
The budget and fiscal plan also contains the carbon tax plan required under section 3 of the Carbon Tax Act and other documents required under section 4 of the same act.
I also table, on behalf of the ministers responsible, the service plans, as required under section 13 of the Budget Transparency and Accountability Act. The service plan documents are presented in two binders. The first binder contains service plans for the Office of the Premier and 20 ministries. The second binder contains service plans for 26 service delivery agencies and Crown corporations. The second binder includes a list of organizations that are exempted from service plan requirements under section 13 of the Budget Transparency and Accountability Act.
Hon. M. de Jong moved adjournment of the House.
Motion approved.
Madame Speaker: This House, at its rising, stands adjourned until 1:30 tomorrow afternoon.
The House adjourned at 3:01 p.m.
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