B.C. budget targets stability, confidence

British Columbia’s 2009 budget supports infrastructure projects to create jobs and build opportunities in the province while providing stability and confidence for British Columbians by investing in health, education and social services, Finance Minister Colin Hansen announced.

“Budget 2009 builds on B.C.’s Economic Plan to help families, communities and business alleviate the effects of the economic slowdown,” said Hansen. “Despite unprecedented global economic turmoil, we are improving public services and making critical investments to create tens of thousands of jobs and position British Columbia as a leader in the coming economic recovery.”

The budget includes an investment of almost $14 billion in infrastructure projects — building and upgrading housing, hospitals, schools and roads — that will generate as many as 88,000 jobs across the province. “Our immediate investment in infrastructure will help stimulate the economy, maintain stability and keep British Columbians working during the downturn — every job counts,” Hansen said. And $1.9 billion will be reallocated to strengthen health, education and social services.

Budget 2009 includes a temporary deficit for two fiscal years due to the impact of the global economic crisis on revenues. The deficit is forecast to be $495 million for 2009/10 and $245 million for 2010/11, with a return to balanced budgets by 2011/12.

“Our enduring commitment to sound fiscal management and prudent budgeting ensures we will not leave a legacy of deficit budgets for future generations,” said Hansen.

“We have worked hard over the last seven years to bring British Columbia back to being a destination for people to live, work, play and invest,” said Hansen. “British Columbia will emerge stronger, more confident, and enter a whole new stage of growth.”

The Investment Industry Association of Canada, meanwhile, has stated that it is happy the province has accelerated the reduction in the small business tax rate (a 2.5% rate this year) and extension of the mining flow through tax credit to the end of 2009. However, it doesn’t think the government has gone far enough.

“We are disappointed the budget has not gone further, given fiscal maneuverability, to introduce further incentives to promote capital investment, such as tax credits for small companies, wider eligibility beyond mining companies for flow-through shares, harmonization of the provincial sales tax with the federal GST and legislative amendments to improve the effectiveness of the International Financial Centre to attract foreign investment,” it said in a press release.

(02/18/09)