Budget lowers income taxes, raises MSP premiums

By Phil Melnychuk

Staff Reporter

The lead-up to the gloomy B.C. budget had taxpayers bracing for the worst Tuesday as talks of skyrocketing deficits and tax increases preceded the document.

But they got off easy, with increases to the amounts they can earn tax free (up from $9,373 to $11,000) and exemption from harmonized sales tax charged on home heating costs, and another break for small business.

The latter measure raises to half a million dollars from $400,000 the amount of income small business can earn at the 2.5 per cent tax rate.

Still, British Columbians will pay more for their health care premiums - which will rise by $6 a month for a family or $3 a month for individuals, to help pay for an 18-per-cent increase in the health care budget over three years.

The budget calls for a $2.8 billion deficit for this year, then dropping to $1.7 billion in 2010.

That's five times higher than what the government predicted during last May's election, pointed out NDP MLA Michael Sather.

"The deceit that the government is engaged in is basically out in the open," he said Tuesday.

"The real bad news for British Columbians is the deficit and the lying that occurred around that."

He didn't know if there were any more big cuts or tax hikes being planned. But he pointed out the environment ministry had its enforcement and compliance department cut by half, which affects monitoring of issues such as the North Alouette River.

The budget says the government will continue its economic stimulus measures, planning to continue to fund its share of a $14-billion three-way partnership with local and federal governments.

Maple Ridge Mayor Ernie Daykin was planning to meet with Transportation Minister Shirley Bond Thursday in Victoria to see if some of that money can come this way. The district had applied for those infrastructure dollars to help it complete its renovations for 224th Street in the downtown.

The budget also addressed a Maple Ridge concern raised Monday about the effects of paying the HST. Council approved sending an emergency resolution to the Union of B.C. Municipalities seeking exemption from the new tax.

However, cities and charities will get HST rebates so they'll pay no more than would currently under the provincial sales tax.

Liberal MLA Marc Dalton reiterated that the government has lost two billion dollars in revenue in the last few months because of plunging resource prices and tax revenue.

But it exceeded its goals from February's budget of cutting costs by more than $1.9 billion, he pointed out.

"The thing is, we're trying to make it more attractive to business here," he added.

Spending cuts in the budget update were mostly disclosed before Tuesday. Many arts groups around B.C. got letters last week advising them they won't be getting their share of lottery funds this year. Tourism Minister Kevin Krueger said the money has been diverted to higher priorities, such as school lunch programs and community daycare.

The budget update confirms that the forests ministry will take a 12 per cent cut. Hansen said with logging down significantly, government monitoring is reduced proportionately.

While the government said it was launching its all-day kindergarten, saying it will commit $151 million to allow half of the students eligible to enroll in kindergarten next year, it also maintained the same per-pupil grant to school districts.

The budget was criticized by Susan Lambert president of the B.C. School Trustees Association.

"We're going to see deteriorating classroom conditions next year, higher class sizes, more students with special needs without support in the classroom. The excuse of declining enrolment is gone," she said. "We're going to have increasing enrolment, according to government projections, next year, and there's no planning for all-day kindergarten."

– with files