Young families and new homeowners were the main beneficiaries of the tightly confined wiggle room in B.C.’s latest budget, one touted by Finance Minister Mike de Jong as boring but balanced.
In an effort to keep to his “razor-thin” estimated surplus, Mr. de Jong offered little in the way of new spending beyond what was previously announced before last year’s provincial election. New money will go toward child care, with $17.7-million set aside to help create 1,000 new licensed child-care spaces. Part of the money will also support the creation of a provincial child-care registry.
Over the next year, British Columbians with young children will begin to receive extra money from the province. As of April, 2015, monthly cheques of up to $55 per child – under the age of six – will be sent to families, while the government will deposit $1,200 into new education savings accounts. Both programs were previously announced.
“Since announcing this a year ago, the registration rate for RESPs in British Columbia has raised 10 per cent,” Mr. de Jong said.
Kyle Richings subsists on a single income and he perked up at the mention of more money being devoted to child care. His family lives in Victoria, with Mr. Richings’s wife staying home to look after their two-year-old son.
“If we just had to live on only my income, without any savings, it’d be pretty nasty,” Mr. Richings said. “The biggest benefit is just money in your pocket, that child benefit, no strings attached.”
For first-time home buyers, the threshold for the provincial transfer tax will be increased from $425,000 to $475,000. “The tax and thresholds were set when property values were very different. No one can argue with that,” Mr. de Jong said. Effective Wednesday, the measure could save home buyers up to $7,500, according to budget documents.
The targeted measures do not benefit everyone. “Houses will cost less and children will cost less, which makes little impact for people without children or those not buying houses,” said Steven Masuch, a 28-year-old who lives in downtown Vancouver. Like many his age, he can’t afford to buy a house. He and his partner aren’t interested in having children.
There will be no changes to provincial income taxes for most earners, though a previously announced tax hike for people with incomes above $150,000 will start this year. The temporary measure will expire in 2015.
Disappointed by the few changes to the province’s tax regime, Chartered Professional Accountants of British Columbia warned that higher corporate and sales taxes were causing investors to hesitate before moving jobs to the province.
“It’s not about high taxes, but about uncompetitive taxes,” said Richard Rees, speaking for the province’s CPAs. While B.C.’s taxes are higher than neighbouring Alberta’s, they are among the lowest in the country.
“I’m a bit worried about how low corporate taxes are in B.C.,” said Mr. Masuch, a software developer and small business owner. “It just seems like a bit of corporate favouritism.”
The province’s medical premiums are also set to increase by 4 per cent, an extra $60 annually for a two-person family.
Following the federal government’s announcement last week adding 40 cents per pack of cigarettes, smokers in British Columbia will now face an additional 32 cents per pack in provincial tax. Calling the health costs of smoking “incredible,” Mr. de Jong said that part of the $50-million raised by the higher taxes will be earmarked for cancer research.
By JUSTIN GIOVANNETTI, The Globe and Mail