Fiscal road map or attack on middle class?
Deficit will be eliminated by 2013- 14; low debt level keeps triple- A rating intact: Falcon
With Budget 2012, your B. C. government has set out a plan to eliminate the deficit in 2013- 14, protect public services, and build a more competitive economy that generates jobs and attracts new investment. It’s built on fiscal discipline, and it lays a firm foundation for the future we all want.
We have worked hard to keep our fiscal house in order through the ups and downs of the last decade — not just meeting, but outperforming our budget targets in nine out of 10 years.
This discipline gives us an edge in attracting investment. It gives us an edge in protecting and creating jobs. It gives us an edge in generating revenues that we can then invest in important public services. It instils confidence, and it reinforces the growing awareness of British Columbia and Canada as a safe harbour for investment and investors.
Revenues are projected to rise by 2.9 per cent annually. Spending will increase by just two per cent annually over the next three years, with most new funding targeted to health care and education. Despite the challenging economic environment, we are delivering strategic investments and incentives that support families and job creators throughout the province.
Funding for the Ministry of Health will increase, as it has every year since 2001. In 201415, the ministry’s budget will be $ 1.5 billion higher than it is today. Funding to school districts will also increase, despite a trend of declining enrolment. In addition to the $ 4.7 billion a year school districts will receive for the next three years, government is investing an additional $ 165 million to establish a fund to deal directly with issues of class composition.
The key to economic opportunity is a low tax environment. B. C. has the lowest provincial personal income taxes in Canada for individuals earning up to $ 120,000 year. We’ve also reduced the corporate income tax rate five times, for a total reduction of almost 40 per cent since 2001.
Given the uncertain global fiscal environment, the small business corporate tax rate will be maintained at 2.5 per cent. The fiscal plan also includes a temporary, one- point increase in the general corporate income tax rate for large businesses to 11 per cent, effective April 1, 2014. I believe we can balance the budget without the increase, and it will only be triggered if the fiscal situation worsens beyond our already conservative assumptions. Our corporate income tax rates are today among the lowest in the country and G7 nations.
Targeted tax reductions will support small business and set the stage for further growth in Asia- Pacific trade with new support for aviation and port development. The budget also brings new certainty and fairness to the newhome construction sector, as we make the transition back to a provincial sales tax, effective April 1, 2013.
Home builders and buyers alike will benefit from the new first- time new homebuyer’s bonus. First- time buyers who purchase newly built homes before March 31, 2013, will be eligible for a personal income tax credit of up to $ 10,000. Seniors and their families will benefit from a new seniors’ home renovation tax credit of up to $ 1,000. Families with children will benefit from the new children’s fitness and arts tax credits.
As the current climate of global economic uncertainty continues, it is more important than ever that we maintain fiscal discipline with low debt, competitive taxes and a triple-A credit rating. That drives job growth, income growth and revenue growth, so we can afford to invest in public services, even as governments in other jurisdictions are implementing drastic austerity programs.
Sound fiscal management has given us a great competitive advantage in today’s world. With Budget 2012, we will build on that advantage to create a stronger, more secure future for British Columbia.