Attorney General David Eby looks on as Finance Minister Carole James delivers the budget speech from the legislative assembly at Legislature in Victoria, B.C., on Tuesday, February 20, 2018.
Image Credit: THE CANADIAN PRESS/Chad Hipolito
February 20, 2018 - 3:00 PM
VICTORIA - British Columbia moved to ease the province's housing crisis Tuesday with a new tax on property speculators and higher taxes on foreign homebuyers with a budget that plans to create 114,000 affordable housing units over the next decade.
Finance Minister Carole James said the tax measures are part of the government's aim to improve housing affordability in markets where some seniors are forced to live in their vehicles and young professionals are refusing to take jobs in B.C. because they can't find a place to live.
"We can't fix the housing crisis overnight but we can act," said James. "A budget is more than revenue and expenses. A budget is about people. It's about the kind of communities we want and the kind of future we want."
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The minister defended the new and increased taxes in her budget as the right path to restore affordability.
Easing the financial pinch felt by families was a recurring theme in the first full budget brought in by the NDP since it came to power last summer.
"We live in a province rich in people, resources, natural beauty and opportunities," James said in her budget speech. "Yet those opportunities have become further and further out of reach for many."
B.C.'s housing crisis was a major issue in last year's provincial election that saw the New Democrats form a minority government with the backing of the three-member Green caucus, ending the Liberals' grip on power after 16 years in what was largely seen as a rebuke of its tight-fisted fiscal management that neglected spending on social programs.
James said the budget reflects the outcome of the election.
"It's time for a different approach," she said. "It's time everyone in our province is part of our prosperity."
The speculation tax will come in later this year, targeting foreign and domestic buyers who do not pay B.C. income tax in Metro Vancouver, the Fraser Valley, the Victoria-area, Nanaimo Regional District, Kelowna and West Kelowna.
The foreign buyers tax jumps from 15 to 20 per cent on Wednesday and will be expanded beyond Metro Vancouver to include much of southern Vancouver Island, the central Okanagan and the Fraser Valley.
"Our goal is fairness," said James. "This is a major step to end speculation in our marketplace. We're asking those who benefited from high prices to give a little bit back."
The government will also eliminate medical services premiums on Jan. 1, 2020, saving individuals up to $900 annually and families $1,800. It will be replaced with a new payroll tax on employers, although those with payrolls under $500,000 will be exempt.
James described the government's plan to invest more than $1 billion in child care as historic for B.C. The money will help create more than 22,000 spaces and offer monthly benefits of $1,250 to 86,000 families.
James said despite a shortfall of more than $1 billion at the Insurance Corporation of British Columbia and the high cost of fighting last year's wildfires, the budget is forecast to have a surplus of $219 million for 2018-19.
Economic growth is forecast at 2.3 per cent this year and the jobless rate of 5.1 per cent last year was the lowest in Canada.
"The budget is balanced in its approach and it's fiscally balanced," James said. "It makes a historic investment to take care of children. It takes bold steps to tackle the housing crisis."
News from © The Canadian Press, 2018