On February 22, the Surrey Board of Trade’s Policy & Research Manager, Jasroop Gosal, was in Victoria at the BC Budget lock up to hear the BC Government release their 2024 Budget and Three-Year Fiscal Plan before it was released to the public.
“The Surrey Board of Trade is pleased to hear about the increased threshold for the Employer Health Tax, and that the Surrey-Langley SkyTrain and the SFU Medical School projects were specifically mentioned in the budget,” said Anita Huberman, President & CEO, Surrey Board of Trade.
“We are disappointed that a tax review was not mentioned, and that Surrey will not receive capital investments in Budget 2024 for more health care services at the second hospital in Surrey or for schools. There was no indication of further funds committed if the Surrey policing transition is to continue. Funding for Bus Rapid Transit projects or other transit improvements connecting Surrey all together were also omitted from this budget.”
SPECIFICS
Budget 2024 projects deficits (billions) of:
$5.914 in 2023/24 (updated forecast)
$7.911 in 2024/25 (budgeted)
$7.773 in 2025/26 (planned)
$6.288 in 2026/27 (planned)
Capital spending (billions):
$14.859 in 2023/24 (updated forecast)
$18.756 in 2024/25 (budgeted)
$19.037 in 2025/26 (planned)
$18.706 in 2026/27 (planned)
Total provincial debt at year end (millions):
$103,783 2023/24 (updated forecast)
$123,267 2024/25 (budgeted)
$145,260 2025/26 (planned)
$164,973 in 2026/27 (planned)
Real GDP
The Budget 2024 plan assumes annual real GDP growth of 1 per cent in 2023 (nominal at 3.2%)
0.8 per cent in 2024 (nominal at 3.3%)
2.3 per cent in 2025 (nominal at 4.4%)
2.4 per cent in 2026 (nominal at 4.5%)
Revenue Outlook
Total government revenue is forecast at $77.320 billion in 2023/24, $81.523 billion in 2024/25, $82.938 billion in 2025/26, and $86.408 billion in 2026/27.
Expense Outlook
Total expenses over the three-year fiscal plan are forecast at $83.234 billion in 2023/24, $89.434 billion in 2024/25, $90.611 billion in 2025/26, and $92.696 billion in 2026/27.
Contingency Allocations
$3.885 billion in 2024/25, $3.020 billion in 2025/26 and $3.730 billion in 2026/27. The contingency allocation is a prudent measure to provide for unforeseen costs that may arise, such as the upcoming FIFA World Cup matches, and to fund priority initiatives, as well as CleanBC. The contingency provision is higher than normal to also account for costs for climate related disasters.
Business Support
An increase to the exemption threshold from $500,000 to $1 million is to start in the 2024 calendar year. The change is estimated to save businesses more than $100 million annually. The notch rate for renumeration above the new exemption threshold of $1 million and below the full rate threshold of $1.5 million is increased from 2.925 per cent to 5.850 per cent.
$288 million over three years to sustain Future Ready initiatives including doubling student loan maximums and reducing repayment obligations.
Training tax credits extended for three years to the end of 2027 to provide both apprentices and employers for apprentices with disabilities or who are First Nations.
Housing Affordability
Residential home flipping tax of 20% (if sold within 365 days of purchase) on profits starting on January 1, 2025. Exemptions include certain life circumstances (divorce, death, disability, illness, relocation, job loss, household membership change, personal safety, insolvency) and those who add to the housing supply or engage in construction and real estate development.
Property transfer tax exemptions for first-time home buyers’ thresholds will increase from $500,000 to $835,000 fair market value. Newly built home exemption threshold will be increased from $750,000 to $1.1 million. Additionally, there will be an exemption for new purpose-built rental buildings.
$198 million over three years towards the new BC Builds program with $150 million of operating funding and $48 million in capital funding.
Transportation
$50 million in capital funding for active transportation infrastructure.
$2.3 billion investments towards Highway 1 Phase 3A.
$287 million for permanent solutions for the sections of Highway 1 that were damaged due to the atmospheric event.
$4.0 billion to construct the Surrey Langley SkyTrain project. Expected to be completed in 2028.
$4.2 billion to construct the immersed tube Fraser River Tunnel. Expected to be completed in 2030.
$991 million to upgrade Highway 1 between Kamloops and Golden.
$345 million to widen Highway 1 through Langley.
Critical Minerals
$24 million for regional and major mines permitting and support for the Act reform.
Climate
$1.3 billion in new funding measures to mitigate and better respond to the impacts of climate emergencies.
$18 million supporting provincial and regional operation centres to better coordinate vital communications during hazard and evacuations.
$77 million to upgrade the Barrowtown pump station in Abbotsford.
$83 million for the Agriculture Water Infrastructure Program to manage, collect, transport and store water for agricultural irrigation.
$50 million for the purchase and installation of water metering in select communities.
$21 million in capital funding over three years for wildfire response, recovery and infrastructure resources.
K-12 Enrolment Growth
$968 million in new funding over three years for more teachers and support staff.
This funding includes $651 million for public school enrolment growth and $62 million for independent school education costs.
There is also $255 million to increase funding for the Classroom Enhancement Fund to support hiring of additional teachers including special education teachers, psychologists, and counsellors.
Total annual operating funding is at $8.7 billion in 2024/25.
“We look forward to the year ahead to help guide the Provincial Government in creating an economic wellbeing budget to ensure we have strong economic stability and to advise the Government on implementation of the budget through policies and programs,” Huberman added.
Read the full 2024 Budget and Fiscal Plan.
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Anita Huberman, 604-634-0342, anita@businessinsurrey.com
Surrey Board of Trade 10 Point Economic Plan
HEALTHCARE
COVID-19 won’t be the last pandemic or disaster that we face. Governments can continue to unlock potential in primary care, digital and telehealth sectors to make these services efficient and accessible to all.
EDUCATION
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
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 or flood) —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 the government prepare workforces for a technology-focused future and improve the long-term competitiveness and resilience of key industries.
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