B.C. minister of finance and deputy premier Mike De Jong was the keynote speaker at the Independent Contractors and Businesses Association CEO Breakfast at Buildex Vancouver on Feb. 24.
De Jong began by explaining that the surplus for B.C. increased by $112 million since the second Quarterly Report. Commercial crown revenue is down a bit, "mostly due to ICBC," De Jong said.
The surplus sets B.C. apart from practically any other jurisdiction with the possible exception of Quebec, De Jong said.
He characterized future growth as "steady, solid, stable, not spectacular," but added "in comparison to other jurisdictions, that's not a bad place to be."
Private sector growth is also looking good compared to other provinces, and retail sales are continuing to grow at a robust rate. Housing starts are hovering "just above average" and employment is growing at 1.2 per cent.
"There's more people coming back to the province and in the labour force looking for work," De Jong said, and pointed out that the influx from provinces such as Alberta will also put a little strain on social services.
The three year fiscal plan forecasts 2015/201 surplus at 377 million, and by 2018/19 that surplus goes to 373 million.
Direct operating debt is at its lowest point since 1984/95, with the Budget 2016 debt at $2.7 billion. Previously it had been as high as $15 billion.
"There are tangible benefits that go with eliminating debt. We will not spend half a billion dollars on interest payments to bankers," he said. "We are reacquiring the ability to make some choices."
British Columbia has a Triple A credit rating, which De Jong said combined with the balanced budget means the province can borrow money for infrastructure at a lower rate than most provinces.
Three year taxpayer supported infrastructure spending totals $12 billion, and "there's a multi- generational aspect to these numbers. This infrastructure will benefit our children and grandchildren."
The debt is mainly for infrastructure, De Jong said. Exceeding health care, ministry budget increases total $1.6 billion over the fiscal plan period, he added.
The budget also implements a commission on tax competiveness, in order to consider ways to modernize the existing tax structure given the changing economy. The scope of work will explicitly exclude consideration of a harmonized sales tax.
De Jong also pointed out that B.C. has the lowest provincial personal income taxes for individuals.
In terms of real estate, De Jong said the government is committed to collecting better data. "Let's get beyond theories and speculation and get the data," he said.
Up until 1998, the government collected information on the citizenship of those who registered property. It was discontinued due to compliance costs and lack of data use.
But effective summer 2016 data will be collected again, he said. Also, effective February 17, 20o16, new housing up to $750,000 will be exempt from property transfer tax. The property transfer tax rate will increase from two per cent to three per cent on th portion of fair market value over $2 million. The home owner grant threshold is increased from $1.1 million to $1.2 million for the 2016 tax year.