Deficit budget possible for B.C.

Iwould like to begin my update with a sincere thank-you to the many firefighters, first responders and volunteers who have worked tirelessly to protect local residents from multiple wildfires and significant flooding in our region.

This has been a devastating summer, however we have been fortunate there has been no loss of life and many structures were saved thanks to outstanding efforts by all involved.

The Legislature is once again in session in Victoria. One government bill introduced this week intends to ban big money from political donations.

Although this bill contains much of what the NDP had promised when in Opposition, it also contains something new— specifically, $16 million in direct taxpayer subsidies to political parties over the next four years. This is in spite of the pre-existing generous tax credit for donating to political parties.

Last week, the NDP government introduced its first budget since 2001. In what was a surprise to many, several key promises from the NDP campaign platform were left out of this budget. Items such as $10-a-day childcare, a monthly rental credit for tenants, and a rate freeze for B.C. Hydro, B.C. Ferries and ICBC have all been abandoned.

The NDP inherited a budget surplus of $2.7 billion and have increased overall spending by roughly $1.7 billion. Some of that additional spending will follow previous commitments from the past government, while other spending will be focused on priorities specifically announced by the NDP. One of these items is the elimination of the Port Mann and Golden Ears Bridge tolls on the Lower Mainland; an area where the NDP elected a majority of new MLAs.

Immediately removing tolls from these two bridges is going to cost $132 million this fiscal year. Furthermore, it will cost at least $135 million per year for the foreseeable future to cover lost tolling revenue on the Port Mann Bridge — and it’s still unclear how much revenue will be lost from the TransLink-owned Golden Ears Bridge and who will pay the bill.

In addition, the NDP plans to increase monthly welfare rates at an estimated annual cost of $104 million in new spending. These figures are based on an increase over the initial budget announced in February.

Taxes and revenues will also increase by an estimated $1.6 billion. To be clear, this figure is not solely based on tax increases. The NDP have predicted higher GDP growth that in turn will increase revenue.

Of all the tax hikes, the one measure that will impact most citizens is another increase at the gas pumps. The NDP plans to increase the carbon tax, and at the same time, eliminate corresponding tax cuts removing its revenue neutrality. People with incomes over $150,000 will see increased personal tax rates, and B.C.’s corporate tax rate will increase from 11 per cent to 12 per cent. Collectively, these tax increases are predicted to raise close to an additional $150 million.

Overall, the NDP claims this is a balanced budget with a $246 million contingency. If the NDP’s predicted increase of the GDP holds and the tax increases yield the expected revenue, the budget should balance.

In the event predictions are overly optimistic, B.C. could see a deficit budget. This would leave the NDP no fiscal room to accommodate other promises such as $10-a-day childcare, rental subsidies and rate freezes.

On a closing note, I was honoured to be re-named as the deputy chair of the all-party Select Standing Committee on Finance and Government Services, in addition to being named as the critic for Indigenous Relations.

I look forward to representing citizens in these new roles.

My office is located at 210-300 Riverside Drive in Penticton. Please call 250-487-4400 for more information.

Dan Ashton is the Liberal MLA for Penticton.