B.C. government unveils budget big on social spending, low on new taxes

Times Colonist

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Parents will receive a larger child benefit until their child is 18, students will no longer have to pay interest on B.C. student loans, and people on income assistance and disability will receive $50 more a month, as the government unveiled a budget that’s big on social spending and low on new taxes.

B.C. flag/Shutterstock

The biggest goody for families in the 2019 budget was an enhanced B.C. Child Opportunity Benefit that replaces the Early Childhood Tax Benefit. Under the new benefit, families with one child will receive up to $1,600 a year, compared with $660 a year. Families with two children will receive a maximum of $2,600 a year, up from $1,320, and parents of three will receive $3,400, up from $1,980. The benefit continues until age 18, 12 years longer than the current benefit, which ends at age six.

“Our government believes that every parent should be able to give their kids a good start in life,” Finance Minister Carole James said in her budget speech. “We believe that no child should be forced to go to school without a lunch or school supplies. And no child should be denied the chance to play sports or be in a band because their family can’t afford the equipment.”

Families with one child and a household income of $97,500 or less are eligible for the benefit and families with two kids will receive the benefit if they earn a household income of $114,500 or less. The benefit takes effect in October 2020 and will cost the government $125 million in 2020/21 and $250 million in 2021/22.

“For anyone who has raised a child, they know how transformational that kind of support will be,” James said. “From the ability to put healthy meals on the dinner table, to being able to buy your child a good winter coat, that kind of support is going to make an incredible difference.”

Trish Garner of the B.C. Poverty Reduction Coalition said B.C. was the only province that limited the child benefit to age six. “That will make a significant difference for families in poverty,” she said.

“We all know when your child turns six, costs don’t suddenly go down. So to get that up to age 18 is a big win for families,” said Sharon Gregson of the Coalition of Child Care Advocates of B.C.

The budget projects a surplus of $274 million in 2019/20 but increases B.C.’s total debt to $72.5 billion in 2019/20 and $82.4 billion in 2021/22.

The budget also eliminates interest on B.C. student loans, which will stop accumulating interest as of today. Someone with a $28,000 federal and provincial student loan will save about $2,300 in interest charges over a 10-year period. This measure will cost the government $31 million a year.

Relieving student loan interest will ease the burden on students who face mounting debt in addition to higher rental costs, said Noah Berson, Chair of the Alliance of B.C. Students, which represents a coalition of student unions across B.C. Berson is a student at Capilano University and said while he’s lucky enough not to rely on student loans, he knows of some students who have considered dropping out because they can’t handle the debt load.

Income and disability assistance payments will rise by $50 a month effective April 1, for a total increase of $150 per month since 2017.

However, Douglas King from Together Against Poverty, said $50 is a drop in the bucket, and still leaves the poorest in the community more than 50 per cent below the poverty line.

BC Budget 2020
Attorney General David Eby, left and Premier John Horgan look on as Finance Minister Carole James delivers the budget speech at the legislature in Victoria today.

“There’s very little for people who are the most poor, the most marginalized individuals,” King said. “We’re a little disappointed in that, we wanted to see the kind of investment that we’ve seen in child care to poverty reduction and we’re not necessarily seeing that in this budget.”

The government promised in last week’s throne speech to unveil a poverty reduction plan, but James said specifics on the plan will be made during a major announcement in the coming weeks. However, she said the B.C. Child Opportunity Benefit is a major pillar of that plan.

Renters facing eviction, who can’t pay their rent because of a financial crisis, will be able to receive low- or no-interest loans from rent banks, which will be operated by community organizations and funded by a new $10-million provincial grant.

“This means that renters on the brink of eviction will be able to get an immediate short-term loan, because no one benefits when families are thrown out onto the street,” James said.

The budget also includes:

  • $6 million a year for respite services for parents of children with disabilities. This increases the respite benefit by 10 per cent, up to $280 a year, and aims to reduce the wait-list for respite services.
  • $85 million to increase payment for foster parents, adoptive parents and relatives caring for children in care by $179 a month. Those payments haven’t increased in a decade. Relatives caring for children will receive payments equal to foster parents.
  • $45 million over three years for Community Living BC home-share providers, who care for and house adults with developmental disabilities
  • A $76-million homelessness action plan that will see the government buy land for affordable housing and build up to 2,200 modular homes.
  • $42 million to expand the PharmaCare program, providing coverage for more prescription drugs
  • $21 million to expand B.C. Transit and HandyDart services in 30 urban and rural communities.
  • $9 million over three years to bring hide-hailing to B.C. This will pay for enhanced enforcement activities and supports the expanded powers of the Passenger Transportation Board.
  • $50 million to expand high-speed internet in rural and remote communities
  • $41 million for incentives that help people make clean energy retrofits to their homes.

The province will establish an agreement to share gaming grant revenue with First Nations. This will allow First Nations communities to receive long-term funding of over $3 billion over 25 years to support reconciliation, including $300 million in the next three years.

To tackle the shortage of early childhood educators, who are often put off by low wages, the province will fund a $1-an-hour wage enhancement in 2020, which builds on the $1-an-hour boost that came into effect in 2019. Last year, the government announced it was investing $1 billion over three years for affordable childcare, which translates into $366 million this year to fund childcare subsidies and to create thousands more licensed childcare spaces.

Unlike last year’s budget which introduced a raft of news taxes, including the Employer Health Tax, an expansion of the foreign buyers tax and the speculation tax, the government claims there are no new tax measures that increased provincial government revenue in the 2019 budget.

Liberal Leader Andrew Wilkinson said the NDP government keeps on spending with no long-term plan for economic growth.

This government is “trying to buy loyalty from people in ways we can’t afford,” Wilkinson said.

With little focus on jobs or the economy, the government is “treading water” to pay for social programs despite a 25 per cent drop in housing starts and a decrease in natural resource revenues, he said.