Finance Minister Katrine Conroy recently unveiled Budget 2024, the budget and fiscal plan for 2024/25 – 2026/27, presenting a strategic plan aimed at supporting residents and businesses while tackling critical needs across various sectors. This budget allocates funds for key initiatives ranging from infrastructure investments to targeted assistance for small businesses, ostensibly demonstrating the government’s commitment to fostering economic growth and resilience.
One of the most significant aspects of the budget is its focus on increased spending on programs and capital, as previously indicated by the government. However, deficits are forecasted over the fiscal plan. For the next fiscal year, a deficit of $7.911 billion is projected, including a $3.89 billion contingency fund. Additionally, the debt is expected to rise significantly, reaching $164.97 billion by the end of the fiscal plan.
Let’s delve into some key figures and initiatives outlined in the budget:
Support for Businesses:
Over $500 million has been allocated toward supporting small businesses through grants, loans, and other initiatives such as the small business venture capital tax credit. A one-time BC Electricity Affordability Credit will help reduce electricity bills for businesses in the coming year. Budget 2024 also provides a higher Employer Health Tax exemption threshold, doubled from $500,000 to $1 million.
Budget 2024 will provide $228 million over three years to sustain programs under the Stronger BC: Future Ready Action Plan, helping close the skills gap many businesses are facing.
Infrastructure Investment:
Capital spending on schools, post-secondary facilities, housing, health-care facilities, highways, bridges, and other taxpayer-supported infrastructure is expected to be $43.3 billion over the three-year fiscal plan period from 2024-2027.
Priority infrastructure projects and programs to decrease flood risks and strengthen drought resiliency will receive $234 million. This includes $83 million to expand the Agriculture Water Infrastructure Program to help farmers and ranchers manage, collect, transport and store water for agriculture and irrigation purposes. It also includes $14 million to help replace the 50-year-old Cowichan Lake weir.
Green Initiatives:
Overall, $1.3 billion will be provided for new measures to help mitigate and respond to the impact of climate emergencies, and build a cleaner economy. Through Clean BC $318 million will be spent over the next three years including:
- $20 million in active transportation grants
- $40 million for additional heat pump rebates for low and middle-income households
- $30 million for the implementation of electric vehicle charging infrastructure
- $3 million to support youth involvement in climate-action initiatives
Housing Affordability:
Budget 2024 allocates $700 million towards housing initiatives, including new tax measures as part of the Homes for People plan. To discourage investors from driving up prices, there will be a new tax targeting home flipping activity starting on January 1, 2025. This will be a tax on the profit made from selling a residential property within two years of buying it.
There are also new tax measures to raise exemption thresholds for property transfer tax for first-time home buyers and newly built homes to help lower costs. There is also an exemption for new, eligible purpose-built rental buildings between January 1, 2025 and December 31, 2030.
Support for Families:
The budget allocates $200 million toward childcare and family support programs that are essential services and support systems for British Columbians. Families will see a 25% increase to their monthly BC Family Benefit with $248 million for a one-year BC Family Benefit Bonus, starting in July 2024.
While the budget outlines significant investments in key areas, it also acknowledges the fiscal realities facing the province. With deficits forecasted over the fiscal plan and a rising debt burden, there is recognition of the need for prudent financial management and responsible stewardship of taxpayer funds.
Ultimately, the success of the budget will be measured by its ability to deliver tangible results for British Columbians. As these initiatives are implemented and their impact assessed, it will become clear whether they have effectively addressed the province’s priorities and contributed to long-term economic resilience and prosperity.
