Colin Hansen, Finance Minister, delivered this years first budget update since May this afternoon in Victoria. The BC Government will overspend its revenues by $2.8 billion this year, ministry expenditures will fall by $500 million over the next three years and BC will run a deficit for the next four. A surplus is imagined by 2013.
Premier Gordon Campbell, right, applauds as Finance Minister Colin Hansen tables the B.C. budget in Victoria Tuesday. (Darryl Dyck/The Canadian Press)
Hansen anticipates another deficit next year of 1.7 billion dollars, and a further 945 million the next. There would be a 140 million dollar shortfall in 2012, and a return to a balanced budget in 2013. By that time, the provincial debt will be 52.8 billion dollars…18 per cent of the province’s gross domestic product.
The new forecast is for total government revenue to hit $37.6 billion, while expenses are forecast to hit $40.1 billion, combined with a forecast allowance of $250 million to give the estimated deficit of $2.78 billion.
http://www.cfax1070.com/newsstory.php?newsId=10380
Healthcare & Education
Despite the massive deficit,
government spending in the 2009-2010 September update is largely characterized by tinkering rather than sweeping changes to most provincial spending, commentators who saw advance copies said.
Funding for health care is forecast to rise $2.4 billion this year, and a total of 18 per cent over the next three years, said Hansen.
The increases in heath-care spending will be paid for in part by a hike in Medical Service Plan premiums of up to $3 per month for single people and $6 a month for families. But about 180,000 low-income earners who are eligible for premium assistance will see their fees eliminated or reduced, Hansen said.
The government will also boost funding for social assistance by $420 million in anticipation of more people losing their jobs as the recession continues to batter B.C.'s export-dependent economy.
Overall funding for education at all levels will rise by over $400 million, to $10.9 billion, including $150 million to roll out full-day kindergarten for five-year-olds in 2009 and 2010, and about $400 million in extra funding for postsecondary institutions.
But funding for elementary and secondary schools will remain relatively flat.
HST
The
personal tax credit will also be increased to $11,000 from $9,373, giving B.C. the lowest provincial personal tax rate in Canada for those earning under $118,000, while the small-business tax threshold will also be raised from $400,000 to $500,000, cutting an estimated $20 million from their share of the tax bill.
The government also plans to eliminate the small-business tax entirely by 2012.
Hanson defended introduction of the controversial harmonized sales tax, saying that in two or three years most consumer items will be priced lower than they would have been. He also said taxpayers will get some relief from the coming HST when it is introduced in July 2010 with a tax credit for low-income earners and rebates on residential fuel bills.
HST rebates will also be offered to municipalities, charities, non-profits and new housing, said Hansen.
Income Tax Breaks
"SO TODAY I AM ANNOUNCING THAT THE PERSONAL ...UH...TAX CREDIT...FOR INCOME TAX CALCULATION, WILL BE INCREASED TO ELEVEN THOUSAND DOLLARS. THAT IS UP BY ONE THOUSAND SIX HUNDRED AND 27 DOLLARS PER PERSON. I AM ALSO ANNOUNCING TODAY THAT WE ARE GOING TO BE PROVIDING A FULL REBATE OF H-S-T FOR RESIDENTIAL ENERGY COSTS"
http://www.cfax1070.com/newsstory.php?newsId=10383
MSP Premiums to rise 6%
January 1, 2010 you will pay 6% more for your MSP. How much you pay is obviously dependent on your income. Hansen says this is not a one time increase and as government expenditure increases on healthcare, MSP rates will keep pace.
No HST break on booze
There’s a paragraph on page 85 in the provincial “budget and fiscal plan” concerning tax on the private sale of used vehicles.
Since they are not currently subject to the federal G-S-T, you might expect they will not be subject to H-S-T…and you’re right. They will not. But the seven per cent provincial sales tax will not come off… same thing applies to private sale of boats and airplanes.
Similarly, there will be no saving for the consumer when the provincial tax on liquor drops from ten per cent to seven, as part of the harmonized tax. Government is simply increasing its mark-ups to ensure that the shelf price…and government liquor revenues…remain constant.
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