B.C. budget taxes business, caps spending

The B.C. government is restricting spending increases and keeping its small business income tax alive

  • Feb. 29, 2012 3:00 p.m.

By Tom Fletcher

Black Press

VICTORIA – The B.C. government is restricting spending increases and keeping its small business income tax alive to meet its balanced budget target before the 2013 election.

Finance Minister Kevin Falcon presented his first budget Tuesday, with a deficit of $969 million for the fiscal year starting April 1, as B.C. pays to end the harmonized sales tax. His three-year plan predicts a $154 million surplus in 2013-14 and $250 million surplus the following year.

To do that, the budget aims to hold government spending growth down to two per cent for three years, with most of it going to health and education. That leaves most other ministries with little or no increase for inflation, a restriction that is expected to reduce overall B.C. government staff from about 27,000 this year to 25,000 by 2014-15.

Falcon also reversed course on business taxes. The government has been promising for years that it would eliminate the small business income tax this spring, after lowering it to the current 2.5 per cent. Now it will continue at 2.5 per cent until B.C.’s financial picture improves.

Falcon is also considering a one per cent increase in the general corporate tax rate to 11 per cent, but not for another year depending on financial conditions. That move positions the B.C. Liberals politically for an election against NDP leader Adrian Dix, who has called for a corporate tax increase.

Canadian Federation of Independent Business spokesperson Shachi Kurl said business people understand the need for government revenue, but the extra tax burden will affect investment.

The last scheduled carbon tax increase will go ahead on July, from 5.56 cents on a litre of gasoline to 6.67 cents. The budget holds that level while a review of the carbon tax program looks at the rate and offsetting income tax cuts.

Falcon promised carbon tax relief soon for greenhouse operators, and hinted at additional help for other farmers.

The cash-strapped government is putting surplus provincial assets up for sale starting next year, including a seven-hectare property north of Kelowna that was proposed for a new Okanagan correctional centre before a new site near Oliver was chosen. Another six-hectare parcel in Surrey is to be sold, along with about 100 others around the province, many of them school properties.

The budget also reveals a plan to sell B.C.’s liquor distribution system and warehouses to a private operator.  Falcon called the move “an opportunity to get out of a business we don’t have to be in,” as well as a way to raise money. Falcon said the deal will protect union workers in the transition to a private wholesaler. Government retail liquor stores are not affected.

Liquor and tobacco taxes will be adjusted to keep prices the same once the HST is phased out.

 

Just Posted

Highlights and winners from the Binche Fishing Derby

The third annual event was a massive succes

Buy BC relaunches to keep business local

Local farmers’ markets may benefit

Province expands program to keep youth away from gang life

The Government of British Columbia is providing $1.12 million in additional funding… Continue reading

Applications for high-speed internet in rural communities being accepted

According to a news release that was issued by the Ministry of… Continue reading

France doubles up Croatia 4-2 to win World Cup

Played in Moscow Russia, latest Fifa World Cup marks the highest scoring final since 1966

VIDEO: Visual recap of Vancouver Island MusicFest

Walk Off The Earth, Passenger, Arlo Guthrie among highlights

Trudeau’s youth council divided over Trans Mountain pipeline purchase

A letter signed by 16 past and present members was made public today, asking the federal government to reverse course

Hulk Hogan reinstated into wrestling Hall of Fame

Hogan had used racial slurs caught on video when talking about his daughter sleeping with a black man

‘Lava bomb’ through roof of tour boat injures 22 in Hawaii

“An explosion occurred near the shoreline hurling hot lava rocks towards the boat and injuring several passengers”

B.C. teen meets Nicolas Cage

Filming mob movie in downtown Vernon, B.C.

Critics claim Trump “defended a tyrant”

Trump questions US intel, not Putin, on Russia 2016 meddling

B.C. MLAs choose new children’s watchdog

Jennifer Charlesworth has worked in government, social services

B.C. reporter calls out immigration photo on social media as fake news

A Vancouver reporter is calling out a British politician for spreading fake news

Hundreds of Arctic glaciers shrinking, disappearing

Out of 1,773 glaciers, 1,353 shrank significantly between 2000 and 2016

Most Read