SURREY BOARD OF TRADE STATEMENT ON BC BUDGET 2021
-Commitment to Surrey Hospital, trade and industry development, strategic investment fund for economic growth; no specific mention of SkyTrain from Surrey-Langley or comprehensive BC tax reform
BC FINANCE MINISTER TO DELIVER DIGITAL POST-BUDGET ADDRESS TO SURREY’S BUSINESS COMMUNITY
April 22 from 4:20pm to 5:20pm
SURREY – The BC Government released the 2021 Provincial Budget on April 20. The Surrey Board of Trade was honoured to be invited by the BC Government to the BC Budget lock-up this morning.
“The Surrey Board of Trade was pleased that specific mention was made to the commitment of building a new Surrey hospital,” said Anita Huberman, CEO, Surrey Board of Trade. “There was no specific mention of a financial commitment though for SkyTrain from Surrey to Langley in the service plan for the Ministry of Transportation and Infrastructure.”
“We were happy to hear that there are financial commitments in the service plan for trade and industry development, small business and economic development, and the strategic investment fund called InBC. As Surrey will be the largest city in BC by 2030, capitalizing on economic development initiatives and industry growth is essential – and that includes leveraging the opportunities in the Cascadia economic region.”
“We didn’t see any specific cost impacts to Surrey’s public safety transition from the RCMP to a municipal police force. The Surrey Board of Trade still maintains that in the end there will be cost impacts as a result of this transition that will affect taxpayers.”
SPECIFICS TO NOTE:
- An ongoing PST exemption on capital investments in select equipment and machinery to help businesses pivot or upgrade operations with an anticipated 110,000 incorporated BC businesses eligible.
- $44 million for Launch Online, connecting businesses with BC technology companies to create or improve their e-commerce and provide digital marketing training to help businesses boost their online sales.
- $10 million to increase value-added manufacturing in BC by supporting small- and medium-sized businesses to make their products more accessible to customers and an additional $6 million in grants for businesses to help strengthen BC’s supply chain.
- $7.5 million to support BC’s growing agri-tech industry.
- $7 million to expand BC’s food hub network and support farm innovation and food processing.
- An average 25% reduction in commercial property taxes 2020.
- An additional $20 million for community destination development grants that will help communities prepare for future visitors through new tourism infrastructure like trails and airport improvements.
- Capital investments will continue to build new schools and upgrade existing ones in communities across BC.
- New funding to support post-secondary education, including new spaces to build training capacity in the health care sector.
- $32 million to continue training launched through the StrongerBC Economic Recovery Plan, including:
• $17 million to partner with Indigenous communities and organizations to expand access to skills training.
• $5 million to expand micro-credential training for people looking to retrain and pursue new careers.
• $10 million for work-integrated learning opportunities and short-term skills training.
- $45 million for youth employment initiatives, creating 5,000 jobs when combined with StrongerBC Economic Recovery Plan investments.
- Childcare investments.
- ARTS AND CULTURE: Government has worked closely with leaders in BC’s arts and entertainment communities to develop targeted recovery funding and has already invested $22.5 million through AmplifyBC to support BC’s music industry over the next three years, and $35 million to support arts and culture organizations. Budget 2021 builds on these investments by doubling the budget for the Arts Infrastructure Program, which will provide $6 million in capital improvement grants to support arts and culture organization recovery.
- WORKING WITH INDUSTRY AND CLEANTECH
• $96 million for the CleanBC Program for Industry to reduce emissions, further expand British Columbia’s clean tech sector and support global competitiveness in the clean economy.
• $60 million to support the Centre for Innovation and Clean Energy and for cleantech investments to expand partnership opportunities with the federal government.
• The Centre for Innovation and Clean Energy will support the development and commercialization of clean technology in BC – creating good jobs and accelerating technology development to help transition to a low-carbon future.
The Surrey Board of Trade realizes that detailed strategies for the BC budget are to come.
- Budget 2021 projects deficits of:
- $8.1 billion in 2020-21 (updated forecast)
- $9.6 billion in 2021-22 (budgeted)
- $5.4 billion in 2022-23 (planned)
- $4.3 billion in 2023-24 (planned)
- Total provincial debt at year end:
- $87.4 billion 2020/2021
- $102.8 billion 2021/2022
- $116.2 billion 2022/2023
- $127.0 billion 2023/2024
- Real GDP is forecasted to return to pre-pandemic levels by 2022
- The Budget 2021 plan assumes annual real GDP growth of 4.4 per cent in 2021 (nominal at 6.4%)
- 3.8 per cent in 2022 (nominal at 5.4%)
- Range between 2.1 per cent and 2.5 per cent annually over the 2023 to 2025 period (nominal at 4.0%)
- Revenue outlook
Total government revenue is forecast at $60.9 billion in 2020-21, $58.9 billion in 2021-22, $63.2 billion in 2022-23, and $65 billion in 2023-24.
- Expense outlook
Total expenses over the three-year fiscal plan are forecast at $61.6 billion for 2020-21, $64.3 billion for 2021-22, $67.0 billion in 2022-23, and $68.6 billion in 2023-24.
- Capital spending
Taxpayer-supported capital spending over the next three years will total $26.4 billion, the highest level ever. This includes completion of existing approved projects along with new investments to expand and sustain provincial infrastructure including schools, post-secondary facilities, affordable housing, roads, bridges and hospitals. The Budget 2021 three-year total is $3.5 billion higher than Budget 2020 mainly due to new capital spending in the areas of health, education and transportation, as well as revised timing for capital projects.In Budget 2021, capital spending on schools, hospitals, roads, bridges, housing, hydro-electric projects and other infrastructure around the province is expected to total $39.5 billion over the three-year fiscal plan period.
Total capital spending:
- $10 billion for 2020-21 (updated forecast)
- $13.4 billion for 2021-22 (budgeted)
- $13.6 billion for 2022-23 (planned)
- $12.3 billion for 2023-24 (planned)
- Debt affordability
BC’s taxpayer-supported debt is projected to be $71.6 billion at the end of fiscal year 2021-22, $82.7 billion in 2022-23 and $92.7 billion at the end of 2023-24. The taxpayer-supported debt-to-GDP ratio, a key metric used by credit rating agencies, is expected to be 22.8% in 2021-22, 25% in 2022-23 and 26.8% in 2023-24.
- Summary of tax measures
Taxpayer impacts for 2021/2022 are negative at $145M.Taxpayer impacts for 2022/2023 will be $80M due to the addition of a carbon tax in the 2022/2023 fiscal year.
- Business support
$806 million for ongoing supports for businesses in 2021-22. Small and Medium Sized Business Recovery Grant in 2021-22 of $195 million. Increased Employment Incentive Tax Credit in 2021-22 of $150 million. Farmer supports to access labour in 2021-22 of $35 million. Tourism sector support in 2021-22 of $120 million. PST exemptions on select machinery and equipment supports in 2021-22 of $235 million. Wholesale pricing for hospitality licensees in 2021-22 of $71 million.
$4 billion in new funding over 3 years, including $3.1 billion to improve the quality of health and mental health care for people, and $900 million in 2021-22 allocated for pandemic response. $585 million over 3 years to hire new health care workers to build capacity. $500 million over 3 years to expand and improve mental health and addictions services and respond to overdose crisis. $748 million over 3 years to expand urgent and primary care centres, and reduce wait times for surgeries and diagnostic services.
- Affordable housing
As part of the 10-year Homes for BC strategy’s $7 billion, Budget 2021 will add $2 billion to expand the HousingHub program to facilitate the creation of 9,000 units of rental housing and homeownership options over the next three to five years. Greater funding for non-profit housing providers and $1.6 billion in capital investments over the plan. Budget 2021-22 will see $1.1 billion, $1.15 billion in 2022-23, and $1.16 billion in 2023-24.
Over the three years of the fiscal plan, approximately $3.5 billion will be invested to maintain, replace, renovate or expand K-12 facilities.
- Post-secondary education
Budget 2021 includes $3.8 billion in total capital spending over the next three years by post-secondary institutions throughout the province. Investments in priority projects will build capacity and help meet the province’s future workforce and economic development needs in key sectors, including health, science, trades and technology.
- Skills and training to improve employment
$96 million over three years for skills training to build health sector capacity. $32 million in 2021-22 for other targeted training to help people recover including skills training programs for Indigenous peoples, micro-credentials, and work experience placement. $36 million in 2021-22 for student and youth employment initiatives. $500 million over 3 years in financing for InBC to attract and anchor high growth business, talent, and good jobs in BC.
$11 million to implement free transit for youth aged 12 and under. Over the three years of the fiscal plan, transportation capital investments totalling $7.5 billion will maintain the flow of people and goods to support BC’s economy. Examples of capital investments in transportation include the Pattullo Bridge replacement project, George Massey Crossing, Surrey-Langley SkyTrain, and Highway 1 widening from Langley to Whatcom Road in Abbotsford. No updates or increased investments were mentioned.
- Fiscal guardrails:
Year-over-year declining deficits, targeted spending criteria, increased prudence levels, pandemic and recovery contingencies, transparent and timely report, and best in class debt metrics contribute to disciplined budget decision-making.
- Childcare support:
$2.2 billion in chidcare funding over 3 years (2021-2024). 400 new spaces for children of Indigenous families, 2000 more families to access supportive childhood development programs, increasing wages by $4-per-hour for 11,000 licensed early childhood educators. $732 million in funding for 2021-22, $772 million in 2022-23, and $773 2023-24.
“We heard that Budget 2022 will present the timeline, approach, and plan to return to fiscal balance, guided by economic indicators and the path and pace of recovery. We will be looking forward to the year ahead to help guide the Provincial Government in creating an economic wellbeing budget to ensure we are part of a strong economic recovery and advise the Government on implementation of the budget through policies and programs.”
The Surrey Board of Trade provided the BC Government with a 10-step guide in order to reimagine governmental support to bolster economic activity:
- HEALTH CARE
This won’t be the last pandemic or disaster that we face. We need to manage and contain the virus but, at the same time, governments can continue to unlock potential in primary care, digital and telehealth sectors to make these services efficient and accessible to all.
Re-skilling and up-skilling must continue to be a priority. Governments need to continue to rethink and implement new learning and education systems. Best practices include adopting hybrid learning models, building skills-based learning modules, funding continuous learning courses, and creating virtual resource centres. Governments and employers can also foster an effective re-skilling ecosystem that includes micro-credentialing for lifelong learning.
- INTERNATIONAL TRADE & SUPPLY CHAINS
Companies will need to make their supply chains more resilient—for example, by reducing the number of unique parts, building in redundancy across suppliers, near-shoring, and regionalizing supply chains. In addition to securing health equipment and essential food supplies, governments can help companies increase their resilience. At the same time, governments may need to consider the policy implications of remote working in the knowledge economy: as exports of highly skilled services grow.
Stimulus needs to work. Some best practices could include expanding green energy and energy efficiency; accelerating government digitization and offering companies incentives to adopt new technologies; and shaping the workforce of the future to increase resilience in the face of rising automation.
- GOVERNMENT EFFICIENCY
Deliver contactless government. The COVID-19 pandemic has made digital transformation a priority— digital channels have become more important, and citizens and customers increasingly prefer them. Examples of best practices include automating daily data collection from key operators to closely monitor and support decision making about critical food items at risk, as well as the use of “express digitization”— rapid development of automated online platforms.
- FINANCIAL ACCOUNTABILITY
Manage government balance sheets with an investor mindset. Many countries have applied traditional debt issuance, revenue optimization, and expenditure control to address the immediate challenge, all of which can be further optimized. Over the medium term—one to three years—governments could monetize the assets on their balance sheets, a strategy that represents a largely untapped and potentially greater opportunity to raise additional revenue and reduce deficits.
- PREPARE FOR THE NEXT CRISIS NOW
Institutionalize best-practice crisis response to prepare for the next crisis. The COVID-19 crisis has pushed many countries to identify and start creating the elements of an effective local outbreak response. Several governments have established crisis nerve centres, enabling coordination of multiple work streams across existing crisis-response structures in government and society for greater response. Establish a plan-ahead crisis unit (for example for an earthquake) —a cross-functional team freed from day-to-day crisis management that looks ahead and considers simulations of various scenarios.
- DATA & ANALYTICS TO HELP ALL BUSINESSES AND REDUCE CITIZEN INEQUALITIES
Make faster, better decisions using data and analytics. Assemble cross-functional teams to develop analytics solutions for faster responses to changing situations and emerging risks and issues. Next practices might include applying advanced use cases in data and analytics, such as nowcasting—forecasting the near future, present, and even the recent past using frequently measured indicators—to inform policy and decision making.
- GOVERNMENT EMPLOYEES – A SMARTER WAY TO WORK
Cultivate smarter, more productive ways for public servants to work. Automation could strengthen public-service productivity and move significant numbers of public servants from back-office jobs into more valuable and meaningful citizen-facing roles.
- PRIVATE SECTOR PARTNERSHIPS ARE ESSENTIAL
Partnering with the private sector and multinational institutions to design and implement well-structured stimulus measures, can help government prepare workforces for a technology-focused future and improve the long-term competitiveness and resilience of key industries.
Anita Huberman, CEO of the Surrey Board of Trade, 604-634-0342 or 604-340-3899 or email@example.com