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B.C. government unveils budget big on social spending, low on new taxes

Parents will receive a larger child benefit until their child is 18, students will no longer have to pay interest on B.C. student loans, and people on income and disability assistance will receive $50 more a month, in a B.C.
Attorney General David Eby, left and Premier John Horgan look on as Finance Minister Carole James delivers the budget speech at the legislature in Victoria today.

Parents will receive a larger child benefit until their child is 18, students will no longer have to pay interest on B.C. student loans, and people on income and disability assistance will receive $50 more a month, in a B.C. budget that’s heavy on social spending and light on new taxes.

The NDP government on Tuesday unveiled a $58-billion budget for the 2019-20 fiscal year, with a surplus of $274 million in 2019-20.

The biggest goody for families in the budget is the B.C. Child Opportunity Benefit that replaces the Early Childhood Tax Benefit. Under the new benefit, families with one child will receive up to $1,600 a year, compared with $660 a year. Families with two children will receive a maximum of $2,600 a year, up from $1,320, and parents of three will receive $3,400, up from $1,980. The benefit continues until age 18, 12 years longer than the current benefit, which ends at age six.

“Our government believes that every parent should be able to give their kids a good start in life,” Finance Minister Carole James said in her budget speech. “We believe that no child should be forced to go to school without a lunch or school supplies. And no child should be denied the chance to play sports or be in a band because their family can’t afford the equipment.”

Families with one child and an annual household income of $97,500 or less are eligible; families with two kids will receive the benefit if they earn a household income of $114,500 or less. The benefit takes effect in October 2020 and will cost the government $125 million in 2020-21 and $250 million in 2021-22.

James said the year-and-a-half delay is because the Canada Revenue Agency needs at least a year’s notice to assist with rolling out the program.

Trish Garner of the B.C. Poverty Reduction Coalition said B.C. was the only province that limited the child benefit to age six. “That will make a significant difference for families in poverty,” she said.

“We all know when your child turns six, costs don’t suddenly go down. So to get that up to age 18 is a big win for families,” said Sharon Gregson of the Coalition of Child Care Advocates of B.C.

The budget eliminates interest on B.C. student loans, which will stop accumulating interest effective immediately. There is currently $1.24 billion in B.C. student loan debt outstanding and over 50,000 new loans are issued each year, according to the Ministry of Finance.

Someone with a $28,000 federal and provincial student loan will save about $2,300 in interest charges over a 10-year period. This measure will cost the government $31 million a year.

Relieving student loan interest will ease the burden on students who face mounting debt in addition to higher rental costs, said Noah Berson, chair of the Alliance of B.C. Students, which represents a coalition of B.C. student unions, and is a student at Capilano University. Berson said while he’s lucky enough to not require student loans, he knows of students who have considered dropping out because they can’t handle the debt load.

Income and disability assistance payments will rise by $50 a month effective April 1, for a total increase of $150 per month since 2017.

Douglas King from Together Against Poverty said $50 is a drop in the bucket, and the welfare rate of $760 a month still leaves the poorest in the community more than 50 per cent below the poverty line.

People with disabilities will now receive $1,183 per month.

“There’s very little for people who are the most poor, the most marginalized individuals,” King said. “We’re a little disappointed in that. We wanted to see the kind of investment that we’ve seen in child care [applied] to poverty reduction and we’re not necessarily seeing that in this budget.”

The government promised in last week’s throne speech to develop a poverty reduction plan. James said specifics will be unveiled in the spring. However, she said the B.C. Child Opportunity Benefit is a major pillar of that plan.

Renters facing eviction, who can’t pay their rent because of a financial crisis, will be able to receive low- or no-interest loans from rent banks, which will be operated by community organizations and funded by a new $10-million provincial grant.

“This means that renters on the brink of eviction will be able to get an immediate short-term loan, because no one benefits when families are thrown out onto the street,” James said.

Unlike last year’s budget which introduced a raft of new taxes, including the Employer Health Tax, an expansion of the foreign buyers real estate tax and the speculation tax, the government said there are no new tax measures that increase provincial government revenue in the 2019 budget.

The budget also includes:

• $902 million over three years for the CleanBC plan which offers incentives for people to buy zero-emissions vehicles and retrofit their homes or businesses with energy efficient technology. CleanBC aims to reduce the province’s greenhouse gas emissions 40 percent below 2007 levels by 2030.

• $85 million to increase paymenta for foster parents, adoptive parents and relatives caring for children in care by $179 a month. Those payments haven’t increased in a decade. Relatives caring for children will receive payments equal to foster parents.

Jennifer Charlesworth, B.C. representative for children and youth, said that measure will reduce the number of Indigenous children who are taken out of their community and placed in foster care. “I can see that’s primarily going to benefit Indigenous family and youth.”

• $45 million over three years for Community Living B.C. home-share providers, who care for and house adults with developmental disabilities.

• A $76-million homelessness action plan to buy land for affordable housing and build an additional 200 modular homes, bringing the total to 2,200.

• $6 million a year for respite services for parents of children with disabilities. This increases the respite benefit by 10 per cent, up to $280 a year, and aims to reduce the wait-list for respite services.

• $42 million to expand the PharmaCare program, providing coverage for more prescription drugs.

• $74 million over three years for mental health and addictions programs for children.

• $21 million to expand B.C. Transit and HandyDart services in 30 urban and rural communities.

• $9 million over three years to bring ride-hailing to B.C. This will pay for enhanced enforcement and expanded powers of the Passenger Transportation Board.

• $50 million to expand high-speed Internet in rural and remote communities.

• $41 million for incentives that help people make clean-energy retrofits to their homes.

The province will establish an agreement to share gaming grant revenue with First Nations. This will allow First Nations communities to receive long-term funding of more than $3 billion over 25 years to support reconciliation, including $300 million in the next three years.

There were no major infrastructure announcements for Vancouver Island.

To tackle the shortage of early childhood educators, who are often put off by low wages, the province will fund a $1-an-hour wage enhancement in 2020, which builds on the $1-an-hour boost that came into effect in 2019. Last year, the government announced it was investing $1 billion over three years for affordable childcare, which translates into $366 million this year to fund childcare subsidies, continue a $10-a-day pilot program for 2,500 families and create thousands more licensed childcare spaces. The only new money for daycare is an additional $9 million per year to meet demand for existing initiatives.

Liberal Leader Andrew Wilkinson said the NDP government has produced a tax and spend budget with no long-term plan for economic growth.

This government is “trying to buy loyalty from people in ways we can’t afford,” Wilkinson said. He noted that the NDP’s most generous social spending plan, the child benefit, doesn’t kick in until the fall of 2020.

With little focus on jobs or the economy, the government is “treading water” to pay for social programs despite a 25 per cent drop in housing starts since 2017 and a decrease in natural resource revenues, Wilkinson said.

B.C. Green Party Leader Andrew Weaver said he’s happy with the budget, particularly the clean energy incentives under the CleanBC plan and the elimination of interest on student loans, both of which were key pillars of the Green platform. “We think this is a good budget, a budget focusing on people and one that has many of our priorities front and centre.”

The Child Opportunity Benefit is a form of universal basic income, Weaver said, which is something the party champions.

The Green Party will support the budget, Weaver said, which is essential to the survival of the NDP minority government.