What to expect in today’s B.C. government budget
VICTORIA – There was a time when a government’s budget was the subject of intense secrecy, its contents only known to a privileged few. Any improper sharing of that information — you know, a budget “leak” – could result in criminal charges or a ministerial resignation.
But times have changed. For years, federal governments have leaked the contents of their budgets over a period of weeks leading to the actual Budget Day.
In B.C., the provincial government has gone even further: it actually tells you (mostly) what’s in the budget TWO YEARS ahead of time!
That’s right: when the budget is released every year it is in the form of a three-year “fiscal plan.” Of course, budgets are merely predictions or projections of how much money is going to come in and how much is going to go out, so the numbers are not set in stone — but they are usually close.
For example, according to the previously published fiscal plan (released with last year’s budget), the Health Ministry’s budget in the coming fiscal year should get an increase of about $450 million, bringing its total one-year budget to about $17.4 billion.
That is by far the single biggest spending increase anywhere in the budget. According to the fiscal plan, next week’s budget will show that most ministry budgets will receive no funding increase, or at best minuscule ones, (the three social service-related ministries will have modest increases of about $40 million each).
Finance Minister Mike de Jong has signaled in encounters with reporters that there may be some tweaking of social service delivery (notably the so-called “clawbacks” of child support payments from those on disability allowances).
The government has a relatively easy task of meeting spending targets set out ahead of time. This current fiscal year (which ends March 31) the government is projected to be about $450 million higher than budgeted, largely due to higher-than-expected forest firing costs (that may sound like a lot, but it amounts only about one per cent of the entire $44.9 billion budget).
Now, it can be a trickier proposition when it comes to predicting revenues because the government of course has much less control over them.
Next week’s budget will show an increase of about $225 million for various government fees and premiums (such as MSP premiums, which have already gone up at the beginning of this year). It will also show hefty revenues from Crown Corporations such as B.C. Hydro (about $650 million), ICBC ($185 million) and B.C. Lotteries (about $1.2 billion).
So we know all that. But what is less clear, at this point, is what the revenue stream will look like from taxes (personal, corporate and sales) and natural resource industries.
I suspect revenues from personal income taxes and the sales tax may exceed what the government had anticipated them to be a year ago. But put this one in the bank: there will be a significant drop in anticipated revenues from natural gas royalties (probably in the neighborhood of $200 million).
Still, next year’s budget will come in as a balanced one, at least on paper. The fiscal plan projects the surplus to be about $430 million, minus a “forecast allowance” of $225 million.
The final surplus number likely won’t be much different than the one projected last year (although I note that for the current year just ending, the surplus will be substantially higher than originally anticipated a year ago).
As for tax increases — there won’t be any (unless you count those hikes to fees and MSP premiums, as is your right to do so!). But there will be a slight tax cut to the top two per cent of wage earners (they were slapped with a higher tax rate two years ago, and that higher rate is set to expire in the coming year).
So the bottom line of what to look for next Tuesday: a balanced budget, a big funding increase for health care, a very small increase for social services, not much money for anything else and no new taxes.
Oh, and when you look at next week’s budget, you can also look at the one to take effect more than a year from now. It’s all part of the rolling three-year fiscal plan, and a reason why budget secrecy is largely a thing of the past.
Global BC will have full coverage of the provincial budget when it is announced Tuesday, Feb. 17.
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