Balanced Budget 2005 shows what we can accomplish — as a province and a people — and it points the way to a future of growth, confidence and prosperity.
In just three years, as a province, we have rebuilt our economy, revitalized our industries, and regained our role as a national leader. We have brought back investment, created hundreds of thousands of jobs, strengthened our communities, and won the right — in 2010 — to host the world's most prestigious cultural and sporting event.
Our province is now moving towards a golden decade and Balanced Budget 2005 will help ensure all British Columbians share in the opportunities ahead with:
Near Record Surplus and Balanced Budgets
The revised surplus forecast for the current fiscal year is $1.4 billion, with a forecast allowance of $300 million, which, if not required, will result in a record surplus.
Balanced Budget 2005 forecasts surpluses of $220 million in 2005/06 and $200 million in each of 2006/07 and 2007/08. Forecast allowances and contingencies will protect the balanced budget projections against unforeseen events and revenue risks.
Record $1.7 Billion Debt Paydown
Total provincial debt at the end of 2004/05 is forecast at $36.1 billion, a $1.7 billion decline from the previous year and the largest annual debt reduction in B.C. history.
Balanced Budget 2005 includes a capital plan for ministries and taxpayer-supported agencies that is substantially higher in value than last year's plan. It includes an additional $1 billion in 2005/06 and $900 million in 2006/07 for planned and new construction of schools, colleges and universities, health facilities and transportation infrastructure.
More Services for British Columbians
Balanced Budget 2005 provides $6.5 billion over the next three years for increased ministry funding for health care, communities, children, education, public safety, economic development and the environment. Reflecting the ongoing service priorities of British Columbians, 71 per cent of the new funding is directed to health care and education.
Balanced Budget 2005 supports tax reductions for lower and moderate income British Columbians, measures to keep home ownership affordable, and increased funding to keep our families safe and strengthen our local communities.
In 2001, the government reduced income taxes for B.C. families by an average of 25 per cent, and by 28 per cent for those earning less than $30,000 a year. With higher revenues fuelled by a stronger economy, the province is in a position to reduce taxes further.
The BC Tax Reduction
Effective this year, a new non-refundable personal income tax credit, the BC Tax Reduction, will reduce or eliminate provincial income taxes for about 730,000 British Columbians. Most individuals earning up to $16,000 a year will pay no provincial income tax and those earning up to $26,000 will pay lower tax.
Improved MSP Premium Assistance Program
A $4,000 increase in the threshold to qualify for the Medical Services Plan Premium Assistance Program will reduce or eliminate premiums for 215,000 people. This means:
Over the next three years, the BC Tax Reduction and the enhanced MSP Premium Assistance Program will provide $480 million in tax reductions for lower and moderate income families, seniors, and individuals.
Examples of Tax Savings
A senior couple with an income of $30,000 will now pay almost $930 less in total provincial tax than in 2001.
A family of four earning $30,000 will now pay almost $1,300 less in total provincial tax than in 2001.
Other Tax Reductions
Balanced Budget 2005 supports other tax reductions including:
Community Infrastructure and Safety
Balanced Budget 2005 provides additional funding for community infrastructure and safety, including:
Through Balanced Budget 2005, the province will have funded $328 million of its $600 million commitment to the 2010 Olympic and Paralympic Games by 2007/08.
Balanced Budget 2005 supports the government's over-arching objective to help British Columbia realize its full potential as the best place on Earth to raise a family; to live and play; to work, invest and get ahead.
To guide its progress, the government has identified five great goals for the decade ahead.
Balanced Budget 2005:
To lead the world in sustainable environmental management, with the best air and water quality and the best fisheries management, bar none.
A healthy environment is critical to a healthy lifestyle. Balanced Budget 2005 provides an additional $150 million to preserve and protect our stunning natural surroundings that help define our province to the world.
These initiatives include:
Balanced Budget 2005 also supports better protection for aquatic habitats with $6 million for fisheries inspection and monitoring and improvements in aquatic animal health.
British Columbians will benefit from safe, reliable and accessible drinking water and improved waste water systems with the creation of a new $80 million B.C. Community Water Improvement Program.
Tax changes to reduce greenhouse gas emissions
Balanced Budget 2005 encourages the development and use of cleaner, alternative energy sources with targeted tax changes that include:
Balanced Budget 2005:
To Make B.C. the best educated, most literate jurisdiction on the continent.
Balanced Budget 2005 supports the highest education budget and highest per-pupil funding in British Columbia history. More students than ever are completing high school, and they are getting the best marks ever in reading, writing and math. As students graduate, they will be able to pursue a wider range of opportunities as the province delivers the largest expansion of post-secondary education in over 40 years.
Total education spending, including K-12, advanced education and skills training, continues to increase each year and will reach $9.8 billion in 2007/08. That represents a $2 billion increase in annual spending since 2000/01.
Balanced Budget 2005 provides an additional $622 million to the Ministry of Education, which allows for a $150 million increase in funding for 2005/06 — the single largest funding increase in a decade. This funding will improve access to:
British Columbia will add 25,000 new post-secondary spaces by 2010.
Balanced Budget 2005 provides an additional $372 million in funding for post-secondary education, including fully funding the province's share of costs for 16,205 seats up to 2007/08 with an overall goal to add 25,000 seats by 2010.
The province will provide $450 million for student financial assistance including loan reductions for students in need, debt relief, a loan forgiveness program and grants for students with disabilities.
Literacy and Arts
Balanced Budget 2005 provides $12 million to public libraries across B.C. for new programs and initiatives including broadband Internet access, a 24-hour virtual reference desk and a one-card system to provide access to books in any B.C. library.
In addition, the budget provides $25 million for the Arts and Culture Endowment Fund that will leverage private sector support to build endowments for arts and culture organizations. The BC Arts Council will also receive an additional $3 million annually.
Balanced Budget 2005:
To build the best system of support in Canada for persons with disabilities, special needs, children at risk and seniors.
Balanced Budget 2005 protects and improves the quality of life for British Columbians most in need with additional funding of:
Balanced Budget 2005:
To lead the way in North America in healthy living and physical fitness.
Nothing is more important to our quality of living and lifestyle in British Columbia than our family's personal health and Balanced Budget 2005 supports government's goal for British Columbians to be healthier and more physically active.
Annual health care funding will increase by $1.5 billion, the largest increase of any government function. Health care funding has increased every year, resulting in a $3.8 billion annual funding increase since 2000/01.
Balanced Budget 2005 will help improve access for critical services such as cancer care, cardiac care, joint replacements and sight restoration, through an additional:
Balanced Budget 2005 also provides $76 million for infant and early childhood vision, dental and hearing screening initiatives.
To support physical fitness, Balanced Budget 2005 provides $50 million for regional sports facilities and $60 million for major post-secondary sports training facilities.
Balanced Budget 2005:
To create more jobs per capita than anywhere else in Canada.
British Columbia's economy performed impressively in 2004, with robust domestic demand evident in strong growth rates for employment, consumer spending, home construction and non-residential investment.
Showing a huge improvement since the 1990s, B.C. now has the second-strongest economic growth rate among the provinces and is expected to continue outperforming the Canadian average in the years ahead.
Since December 2001, the province has created 197,500 new jobs and employment has grown more than 10 per cent, the fastest rate among provinces.
Balanced Budget 2005 supports continued investment in the province's transportation plan. Over the next three years, the province's transportation plan provides:
Balanced Budget 2005 supports the government's great goal to create more jobs per capita than anywhere else in Canada with an additional $777 million for economic development initiatives across sectors and regions of province.
More jobs in small business: improvements to the small business corporate income tax threshold to allow more business income to qualify for the lower 4.5 per cent small business tax rate.
More jobs in agriculture: an additional $49 million for programs to enhance the province's agricultural and aquaculture industries, and to protect food safety.
More jobs in Forestry: an additional $266 million to address the economic impacts of the mountain pine beetle, forest fires and tenure reform while providing new opportunities to industry and communities.
More jobs in Oil and Gas, and Mining: an additional $110 million to help create economic development opportunities in the oil, gas and mining sectors, and a 10-year extension of the Mining Exploration Tax Credit.
More jobs in Tourism: an additional $81 million to enhance economic development opportunities that build on British Columbia's thriving tourism industry
Better jobs for new British Columbians: more than $14 million for B.C. Skills Connect for Immigrants, a program to help new British Columbians find work in their fields of expertise.
More opportunities to reach markets: supports the government's Pacific Gateway Initiative to further develop the province's potential to and from international markets.