Two key aspects of the budget is a speculation tax, and increases in the foreign buyers' tax, to address housing affordability in B.C. by reducing foreign demand, and curbing speculation in the residential property market and an employer health tax to allow for the full elimination of MSP premiums.
VICTORIA – While the "fat-cat" BC Liberals, who did nothing during their reign to bring affordability to the average British Columbians, cried tax hikes, the NDP government did what it said it would in delivering a budget that makes life a little more easier for the common man while balancing the budget with a healthy surplus.
Finance Minister Carole James said budget 2018 carves a new path to shared prosperity for everyone in the province with a made-in-B.C. child-care plan, a comprehensive housing plan and record levels of capital investment in every corner of the province.
"Budgets are not only about the bottom line, they should be about people. That's why British Columbians are at the centre of every choice we have made in Budget 2018," said James. "These include historic investments in child care and affordable housing that will be felt for generations."
Over three years, an investment of more than $1 billion will set the province on the path to a universal child-care plan that will make child care affordable for parents and caregivers, create more than 22,000 child-care spaces throughout the province and ensure those spaces meet rigorous quality and safety standards.
Budget 2018 also lays out a comprehensive housing plan that introduces new taxation measures to tackle foreign and domestic speculation, to close loopholes and crack down on tax fraud, and to stabilize housing prices. It invests more than $1.6 billion over three years to build and maintain affordable rental housing, help finance student housing, increase rental assistance for low-income seniors and working families, and provide supportive housing for at-risk British Columbians.
"Budget 2018 balances the needs and priorities of British Columbians with the fiscal prudence that marks B.C. as an economic leader in Canada," said James. "Our province needs bold action, and Budget 2018 delivers by investing in choices that make life more affordable, improving the services we all count on, and supporting a strong, sustainable economy for all British Columbians."
Making Life More Affordable
Building on the Province's progress to date, Budget 2018 takes action to make life more affordable by:
* Introducing a new affordable child-care benefit that will reduce child-care costs by up to $1,250 per month for every child and support 86,000 B.C. families per year by 2020-21.
* Providing up to $350 per month directly to licenced child-care providers to reduce fees for an estimated 50,000 families per year by 2020-21.
* Curbing speculation in B.C.'s housing market and helping to build 114,000 affordable rental, non-profit, co-op and owner-purchase housing units through partnerships.
* Eliminating Medical Services Plan (MSP) premiums by Jan. 1, 2020, saving individuals up to $900 a year, and families up to $1,800 a year.
* Making ferries more affordable by freezing fares on all major BC Ferries routes, reducing fares on non-major routes and fully restoring the Monday to Thursday seniors passenger fare discount.
* Improving B.C.'s Fair PharmaCare program to eliminate deductibles for families with annual net incomes below $30,000, starting Jan. 1, 2019. Approximately 240,000 families will receive expanded coverage.
* Reinstating free bus passes with the flexibility to support other transportation needs will help over 100,000 people receiving disability assistance to better connect them with their communities and the services they rely on.
Delivering the Services People Count On
British Columbians deserve services they can depend on. That's why Budget 2018 invests in priority services, including:
* Significant investments in health care, with funding of $548 million over three years to improve care for seniors and $150 million to help connect those who do not have a family doctor with team-based primary care.
* Hiring more teachers, bringing the total to over 3,700 new hires around the province to support students and meet the need for qualified teachers in B.C.
* Making a historic investment of $50 million this fiscal year to support the revitalization and preservation of Indigenous languages in B.C.
* Dedicating $18 million to services that provide outreach and counselling support for women and children affected by violence.
* Improving access to justice through increased funding for legal aid, family law services, and the hiring of more sheriffs and court staff to help reduce court delays.
Building a Strong, Sustainable Economy
Budget 2018 invests in a strong, sustainable economy through B.C.'s greatest resource – its people, by:
* Supporting communities hit the hardest by the 2017 wildfire season and investing in wildfire preparedness to protect people, communities and wildlife.
* Increasing funding for B.C.'s agrifood sector to support enhanced Buy BC, Grow BC and Feed BC initiatives to drive consumer demand and get B.C.'s goods to overseas markets.
* Confirming the removal of fees for Adult Basic Education and English Language Learning to give people opportunities to grow and succeed.
* Partnering with industry, the federal government and First Nations communities to support Indigenous skills training programs with $30 million over three years.
* Increasing grants administered through the BC Arts Council and Creative BC, which support B.C.'s vibrant communities and creative economy.
* Expanding B.C.'s tuition waiver program and increasing financial support for former youth in care while they attend post-secondary school or training programs.
Budget 2018 commitments are being funded by improved revenue forecasts over the fiscal plan period, as well as new revenue sources, including:
* A speculation tax, and increases in the foreign buyers' tax, to address housing affordability in B.C. by reducing foreign demand, and curbing speculation in the residential property market.
* An employer health tax to allow for the full elimination of MSP premiums.
"For too long, British Columbians have not been able to get the services that they need or afford to live in the communities in which they work or grew up in," James said. "We are taking bold action to change that with Budget 2018 – a budget that works for everyone in B.C."
BC Real Estate Association Says New Taxes Unlikely To Stabilize Housing Market
VICTORIA –The British Columbia Real Estate Association (BCREA) called on the government to introduce transitional rules for all transactions impacted by the new tax measures introduced in Budget 2018.
BCREA said the new tax measures, which came into effect on February 21, 2018, are unlikely to stabilize the housing market.
The Property Transfer Tax (PTT) increase to 5 per cent for properties over $3 million, as well as the increase to 20 per cent and expansion of the Foreign Buyer's Tax to other parts of the province will have an immediate impact on transactions underway.
When the Foreign Buyers Tax was introduced in 2016, consumers and realtors were frustrated by the number of collapsed deals due to how the tax was introduced. At the time, the Association called for grandfathering of transactions underway to ensure a smooth transition. While the province has indicated transitional rules for the expansion of the Foreign Buyers Tax to other parts of BC, the Association believes this should apply to all transactions.
Of additional concern, the "speculation" tax introduced in the budget will affect British Columbians who own or want to invest in those markets by buying a second home or recreational property
The Association welcomes measures in Budget 2018 to increase the supply of affordable housing in British Columbia. These initiatives are important steps in supporting those who need the most assistance to find and afford housing. However, the government missed the opportunity to help homebuyers across the province by increasing the thresholds to the Property Transfer Tax (PTT) or index those thresholds to reflect the changing real estate market.
The new tax measures introduced by the government to "stabilize the housing market" are unlikely to achieve the intended objective. The taxes ignore the major culprit â€“ matching housing supply and demand within a reasonable timeframe. Additional taxes, whether targeted at foreign buyers or speculators, do not reduce the gap between when a housing project starts, and when it is available to purchase.