Little wiggle room for B. C. budget

The B. C. government, expected to introduce its second consecutive balanced budget Tuesday, has been challenged by a period of withering growth. B. C.’ s economy expanded only 1.4 per cent this year and, by the province’s own reckoning, will grow by a modest 2.2 per cent in 2014- 2015.

Still, Premier Christy Clark, three weeks ago, declared: “We have balanced our budget.”

The province’s own budget consultation paper last fall projected a scant $ 154- million surplus for the coming year. But even a whisker- thin surplus is better than the deficits all other provinces, save Saskatchewan, project.

That said, B. C. has little reason to feel smug, with thousands moving out of the province in recent years in search of more affordable housing and greater job opportunities.

The B. C. branch of the Centre for Policy Alternatives wants more public investment in infrastructure and social programs. But the finance department has already stated, “little new funding is available for new or expanded programs or services.”

It should be kept in mind, fully 41.9 per cent of all provincial spending is gobbled by health care. Another 15 per cent goes to fund kindergarten- to- Grade 12 education. And, on that front, a recent court judgment could be a budget- buster, costing the province upward of $ 1 billion if it’s forced to retroactively reverse cuts to education staffing. The province is appealing the ruling.

The Liberal government has let it be known it wants to grow the economy by way of expanded resource opportunities and invigorated trade with the economies in Asia. So it is likely, if there are new initiatives in Tuesday’s budget, the government will focus on boosting the business sector.

Both the B. C. branch of the Canadian Federation of Business and the Business Council of British Columbia are calling on the government, if the budget is indeed balanced, to address the competitive disadvantage that was created for business following the April 2013 abandonment of the HST and reinstatement of the PST.

The organizations want the province to offer tax credits on business equipment and machinery investments, at an estimated cost of $ 500 million a year.

B. C.’ s Association for Mineral Exploration is seeking a $ 30- million to $ 50- million tax credit to reimburse costs involved in aboriginal consultation on resource development, which legally is the responsibility of governments but, on a practical level, is falling to resource companies.

On the taxation side, the B. C. Real Estate Association has asked the province to redress a situation whereby B. C. has “by far the highest provincial property transfer tax in the country,” with one per cent levied on the first $ 200,000 cost of a home, and two per cent on the balance.

When introduced back in 1987, the two per cent applied to only five per cent of sales. Today it applies to more than 85 per cent of homes sold in B. C. and accounts for 1.6 per cent of provincial tax revenues.

Reassuringly, most of these requests reflect tweaks more than major spending adjustments — in keeping with a broad- based belief that B. C., as a priority, must keep its ledger books in the black.