Liberals defend budget heading into provincial election

The B.C. Liberals tabled a pre-election budget this week that proposes to raise income taxes on business and higher-income earners, mirroring proposals from the NDP.

The corporate income tax rate would jump to 11 per cent April 1, accelerating by a year an increase announced in 2012.

NDP leader Adrian Dix has promised to return the corporate rate to 12 per cent, where it was in 2008.

Carole James, Opposition Critic for Social Development and co-chair of the BC NDP platform committee, notes the irony in the number of times the Liberals have criticized the NDP for considering tax increases.

"Here in a budget they gave I guess what some people could say is the biggest compliment," James said in a Thursday interview.

In Finance Minister Mike de Jong's budget, personal income taxes for those earning $150,000 or more would rise 2.1 per cent to 16.8 per cent for two years, starting January. The increase is to be rolled back to the current rate of 14.7 per cent in 2015.

The Liberals have not raised taxes for nearly 12 years, during which time the party has tabled deficit budgets and cut spending.

"We're making sure that we're not impacting the middle class," Comox Valley Liberal MLA Don McRae said, noting the personal tax is temporary but targets those who can most afford to pay it. About 65,000 British Columbians earn more than $150,000 a year, he added.

"I think the most important thing is we're actually going to balance the budget. That means the money we spend this year will not come with debt that children in the future will have to pay for...We've tried to live within our means."

Besides Saskatchewan, McRae said B.C. is the only province to return to a balance.

"For every dollar the province brings in, we spend about 4.1 cents on debt servicing."

James, however, said de Jong's budget is "bogus" because it is unbalanced. One area that "makes the public scratch their heads" is a plan to sell off close to $500,000 in real estate over the next two fiscal years.

"You don't have a fire sale for one-time dollars to be able to balance a budget," James said. "These are difficult economic times; the real estate market isn't at its best. Wouldn't it be better economics to sell strategic assets at times when the market is high?"

James also criticizes the Liberals for undercutting the health care budget, playing the "same game" from 2009 when they underestimated the amount of health care money then implemented "huge" cuts after the election.

She also notes a proposed four-per-cent increase to MSP premiums, increased hydro rates, and cuts in skills training and post-secondary education.

McRae said the BC Liberals are injecting $2.4 billion into health care in the next three years. He notes there are more than 800,000 low-income earners in B.C. who do not pay MSP premiums, but a middle-class family of four pays about $5 a month.

"I agree there is more being paid, but an average day in the hospital, if you have to spend it, could easily exceed $1,500 to $2,000. Costs of health care continue to rise, and we want to make sure that services are there for those who need it."

McRae also notes in the budget a "strengthening for the Agricultural Land Commission" and some exemption for carbon tax for the agriculture industry.

"I thought that was a really good move and a good support for agriculture," said McRae, the former agriculture minister who now oversees the education portfolio.

Another aspect he notes is a B.C. Training and an Education Savings Grant, where government is giving families access to $1,200 to invest in an RESP.

The provincial election is May 14. The winner of the election must pass a budget in the fall.

With a file from Black Press and CBC.

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