The construction industry is applauding B.C.'s 2017 budget, stating it reaps the benefits of fiscal responsibility. And it isn't just because of money to be spent on infrastructure. New tax measures are also earning praise from industry leaders.
The Independent Contractors and Businesses Association (ICBA) of British Columbia noted that the province's commitment to balanced budgets and fiscal responsibility is paying dividends for residents and for the construction industry.
"The message in this budget is clear — when governments save and spend responsibly they can cut taxes, invest in construction projects and support small businesses," said Chris Gardner, ICBA president. "The government has rolled out an aggressive plan to build our province and to support families and small businesses."
According to the association, the province's $24.5-billion investment in infrastructure will support more than 30,000 construction jobs across B.C.
Investment in infrastructure over the next three years includes $13.7 billion on hospitals, schools, post-secondary institutions and transportation. Approximately $10.8 billion has been set aside for power projects and other transportation projects.
"Balancing over the past five years has given the government the flexibility to make investments that are creating jobs and driving a stronger economy," said Gardner. "The province is also putting money back into the pockets of taxpayers announcing a series of important tax cuts."
These include a small business tax cut from 2.5 per cent to 2.0 per cent — the second lowest in Canada. The province will also eliminate the PST on electricity for businesses starting Oct. 1, 2017 and MSP premiums will be reduced by 50 per cent.
"Now is the time to build. Putting money back into the pockets of families and small business owners will reap strong benefits for the construction sector in B.C.," said Gardner.
Chris Atchison, president of the B.C. Construction Association, called the budget strong and also highlighted the benefits for small businesses.
"The budget announced by the B.C. government is one that puts B.C. first," Atchison said. "Most construction employers are small businesses who will benefit across the board — cuts in taxes and MSP payments will free up cash to hire and train skilled workers. Billions in infrastructure investment will keep everyone working. And investments in building and upgrading post-secondary training facilities across every region of the province means better training for more students."
B.C's Council of Construction Associations (COCA) also expressed strong support.
"COCA is very supportive of the new B.C. budget and the embedded property transfer tax break for B.C. residents," said Dave Baspaly, COCA president. "The tax break is designed to help homebuyers save up to $13,000 from B.C.'s property transfer tax if they purchase a newly built home, condo or townhouse valued under $750,000. We are confident that this move by government will be good for the B.C. construction sector."
Baspaly added the tax break is immediate and will help construction by increasing the overall demand for housing in the province.
"COCA strongly supports any move by government designed to boost the supply of new home construction that in turn gives people a helping hand to enter the market," he said.
Greg Baynton, CEO of the Vancouver Island Construction Association, said the budget will help maintain the province's years of success.
"B.C. has been enjoying strong economic and population growth for the last two to three years," he explained. "Vancouver Island has been one of the beneficiary provincial regions of this growth and investment in construction that has been largely driven by the private sector. B.C. has enjoyed another substantial surplus thanks largely to the high level of residential investment and activity on the Island and other areas of B.C. such as the Lower Mainland."
He added investment in public infrastructure is often cyclical in terms of following a period of sustained private investment, essentially an infrastructure "catch up effect."
"B.C.'s ability to build and pay for the infrastructure announced in the 2017 budget by leveraging B.C.'s enviable balance sheet and credit rating to secure federal infrastructure funding will serve to sustain the positive economy B.C. has been enjoying under the current government," he said.
The Greater Vancouver Board of Trade gave the budget an overall "A" rating after assessing an advanced copy of the budget's economic vision, fiscal prudence and tax competitiveness.
The province is forecasting modest surpluses in all three years of the fiscal plan and anticipates that by the end of 2019-20, the direct operating debt, forecast at $1.1 billion, will be 90 per cent lower than the $10.2 billion in 2013-14. This reduction is estimated to save more than $500 million in interest costs by the end of the fiscal plan.
Officials explained this means there will be an opportunity for B.C. to be free of operating debt as early as 2020-21, which would mark the first time in 45 years the province would not be carrying the burden of operating debt.