FOR IMMEDIATE RELEASE – February 18, 2020
The BC Government released the 2020 Provincial Budget on February 18, indicating a balanced budget.
“The Surrey Board of Trade realizes that detailed strategies for the BC Budget are to come; however, Surrey will be the largest city in BC very soon and needs strategic economic and infrastructure attention,” said Anita Huberman, CEO, Surrey Board of Trade. “A focus to help small and medium sized businesses with reduced red tape and tax competitiveness needed to be additional pathways in the BC Budget presentation.”
“The Surrey Board of Trade does applaud the BC Government on a balanced budget, but concern remains with an uncertain economic indicators, locally and globally.”
WHAT WE DIDN’T HEAR FOR SURREY:
- Transportation: Predictable and sustainable investments in Surrey and the South Fraser Economic Region.
- Education: Investments specifically for K-12, Early Childhood Education, investment in arts education, and for SFU/KPU.
- Taxes: 2019 employers felt the double dip of MSP and the Employer Health Tax. The Surrey Board of Trade wanted to see an increase in the payroll threshold from $500,000 to $1,000,000 to help business. The Surrey Board of Trade advocated for a sugary sweet beverage tax and this happened.
- Housing: Yes, the market has cooled; however, the province must look at ways to work with local governments to increase in supply of market rental housing and social housing for our workforce.
- Public safety: Predictable public safety infrastructure is the cornerstone of economic development. Any shift will cost the BC Government
- Fraser River Revitalization: With the development of the Fraser River waterfront in New Westminster, BC needs to engage with the City of Surrey to develop Surrey’s waterfront.
- Industrial revolution 4.0: Cloud computing, Internet of Things, blockchain, and artificial intelligence are being developed in other parts of the world. BC needs to work with the Federal Government and local municipalities, innovation clusters, and NGOs to cultivate an innovation economy.
OTHER HIGH LEVEL COMMENTS:
- Provincial tax rates
The budget did not announce any changes to the British Columbia corporate tax rates. The BC corporate tax rates of 27%, or 11% for small business, remains on the lower end compared to other Canadian provinces.
The budget proposed an increase in the highest personal income tax rate in BC from 16.80% to 20.5%. The increase results in the combined highest personal income tax rate in BC being 53.5%, which changes BC’s top personal tax rate from being competitive to being the third highest personal income tax rate in Canada.
- Business Tax Measures
PST Exemptions for Certain Beverages: Effective July 1, 2020, carbonated beverages that contain sugar, natural sweeteners or artificial sweeteners will not be subject to PST. From a health perspective this is a good policy. From a business perspective due to the nature of PST (e.g. we don’t have HST) this will be an additional burden on businesses.
PST Registration Requirements Expanded: Effective July 1, 2020 Canadian sellers of goods, along with Canadian and foreign sellers of software and telecommunication services, will be required to register if “specified B.C. revenues” exceed $10,000.
- PST Exemption provided for Electric Aircrafts
Property Transfer Tax Act: The 2020 BC Budget has proposed to introduce a new exemption from additional property transfer tax for qualifying Canadian-controlled limited partnerships to treat Canadian-controlled limited partnerships the same as Canadian-controlled corporations. If implemented properly this will be a good measure as a significant amount of real estate projects are carried on through limited partnership structures.
- Personal Tax Measures
The home owner grant threshold has been decreased from $1.65 million to $1.525 million in order to keep the percentage of homes valued below the threshold consistent with 2016, 2017, 2017 and 2019.
The Income Tax Act has been amended to allow employees to reimburse their employers any overpaid amount net of B.C. income tax withheld and not have that amount included in their income.
HIGHLIGHTS:
- Budget 2020 projects surpluses of:
- $227 million in 2020-21
- $179 million in 2021-22
- $374 million in 2022-23
- Revenue outlook
Total government revenue is forecast at $60.6 billion in 2020-21, $62.4 billion in 2021-22 and $64.2 billion in 2022-23.
- Expense outlook
Total expenses over the three-year fiscal plan are forecast at $60.1 billion for 2020-21, $61.9 billion for 2021-22 and $63.5 billion in 2022-23.
- Capital spending
Taxpayer-supported capital spending over the fiscal plan is a record $22.9 billion and includes new investments to sustain and expand provincial infrastructure, including schools, post-secondary facilities, housing, transit, roads, bridges and hospitals.
- Debt affordability
B.C.’s taxpayer-supported debt is projected to be $49.2 billion at the end of fiscal year 2020-21, $53.9 in 2021-22 and $58.6 billion at the end of 2022-23. The taxpayer-supported debt-to-GDP ratio, a key metric used by credit rating agencies, is expected to remain near 17% by the end of the fiscal plan period.
- Student Loans
Building on the elimination of interest on B.C. student loans, a new needs-based, up-front BC Access Grant will remove barriers to education and provide support for learners to complete their studies. In time for the 2020 fall semester, more than 40,000 eligible students at public colleges and universities throughout the province will receive immediate support with the up-front costs of their education.
The BC Access Grant complements the Canada Student Grant for Full-time Students, ensuring B.C. students receive up to $4,000 a year to help with the cost of programs leading to a degree, diploma or certificate. The new grant will be created with a new $24-million investment over three years, and by
re-designing existing grant programs based on input from B.C. student advocates. This is in addition to approximately $37 million government is reinvesting from grants to ensure students get the help they need when they need it most.
- Creative BC graduate scholarship fund of $12 million
- $3 million in open textbooks for students
- BC Child Opportunity Benefit: up to $1,600 annually for 1 child, up to $3,400 for 3 kids up until 18th birthday
- $450 million to build 5,000 new student beds over 6 years
- 11 new improved trades, healthcare and engineering training facilities in partnership with feds and post-secondary institutions throughout BC
- 24/7 free mental health line for post-secondary students
- $750k in sexual violence prevention programs at post-secondary institutions
- Budget 2020 makes new capital commitments by bringing taxpayer-supported capital spending over three years to $22.9 billion – the highest level in B.C.’s history.
- Health:$6.4 billion to support new construction projects and upgrading of health facilities, medical and diagnostic equipment, and information management systems. Major projects include redevelopment of the Royal Columbian Hospital in New Westminster, new patient care towers at the Royal Inland Hospital in Kamloops and the Penticton Regional Hospital, replacing Mills Memorial Hospital in Terrace and building a new St. Paul’s Hospital in Vancouver.
- Transportation:$7.4 billion for priority projects, including the Pattullo Bridge replacement, the Broadway Subway, four-laning on Highway 1 through Kicking Horse Canyon and improvements to highway corridors in Delta, Langley and along the southern coast of Vancouver Island.
- Education:$2.8 billion to maintain, replace, renovate or expand K-12 facilities in North Vancouver, Sooke School District, Quesnel, Coquitlam, the Greater Victoria School District, Vancouver, Abbotsford and an addition to Valleyview Secondary in Kamloops. Many of these new and upgraded schools will also include neighbourhood learning centres and child care spaces.
- Post-secondary education:$3.1 billion to build capacity and help meet the province’s future workforce needs in key sectors, including health, science, trades and technology.
- Budget 2020 also provides an additional $56 million for 200 new units of supportive modular housing for people who are homeless or at risk of homelessness.
- Adult basic education and English adult education are free
- 1200 former youth in care attending college, trade schools universities for free
- BC Student loans are interest free
- In partnership with the First Nations Health Authority, government has invested $40 million to build two new urban Indigenous treatment centres and rebuild or renovate six more in rural communities.
- Making K-12 education more accessible and reflective of Indigenous experiences – $100-million, five-year agreement supports First Nations students in B.C. who attend on-reserve First Nations schools or off-reserve public or independent schools.
- Investing $30 million over three years to expand the Head Start program in more than 30 communities across the province for addressing the vulnerability factors that can lead to Indigenous children struggling in the school system,
- $7 billion over 10 years to deliver 114k homes for province – 23k homes underway/complete in BC – $4billion over the next 3 years for all ages and income levels to get housing in BC
- $1 billion over 3 years for healthcare – bring down surgical wait times. New hospitals in Surrey and throughout BC.
- Eliminating pharmacare deductible for families
- To help address the growing health costs and impacts of sweetened drinks, BC will begin charging provincial sales tax (PST) on sweetened carbonated beverages.
- Budget 2020 creates a new tax bracket for the top 1% of income earners in British Columbia. Nearly half the revenue generated will come from individuals who make more than $1 million annually.
- The budget delivers an additional $339 million to strengthen B.C.’s K-12 education system — building on recent investments to upgrade schools and hire more than 4,200 new teachers.
- Providing $42 million annually by 2022-23 to add 2,900 tech spaces for a range of technology programming at public post-secondary institutions throughout B.C.
- Investing approximately $30 million overall to expand co-op and work-integrated learning in each of B.C.’s 25 public post-secondary institutions.
- Negotiating a new Workforce Development Agreement with the Government of Canada, providing $685 million over six years to train and improve the skills of 67,000 British Columbians.
- Investments to date include $12.4 million to help more than 2,000 women, youth and other under-represented groups access skilled trades training and $7.5 million for trades training for nearly 500 people in Indigenous communities.
- $283 million over the fiscal plan to enhance community safety and make justice service more accessible, including $57million to individuals can access legal resources, advice, information and representation.
- $65 million per year in additional funding to better respond to wildfires and emergencies in BC.
- An additional $419 million bring the total funding to $1.3 billion for the Clean BC plan over the next 4 years. The additional investment includes:
- $106 million over three years in capital funding for schools, universities and hospitals to improve energy efficiency,
- $120 million in enhanced Climate Action tax Credits for low and middle-income families to offset the impact of the carbon tax,
- $155 million to support the CleanBC Programs for Industry (but details still need to be confirmed and won’t kick-in until 2022/23)
- $9.2 billion over the next 5 years for highway rehabilitation, highway upgrades and public transit including:
- Pattullo Bridge replacement
- Broadway line to Arbutus Street
- Four-laning Highway 1 to the Alberta border
- Highway 1 216th to 264th Street HOV
- Highway 91/17 and Deltaport Way upgrade
For full budget details:
https://news.gov.bc.ca/releases/2020FIN0008-000290
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For more information, contact:
Anita Huberman, CEO
anita@businessinsurrey.com
604.634.0342
