Analyzing B.C.’s 2024 Budget

Major Themes?

Finance Minister Katrine Conroy's Budget 2024 chose near-record deficits over the next three years over cuts to social services, asserting the government's critical obligation to support working families during challenging times. Despite a massive deficit approaching eight billion dollars, the budget prioritizes expenditures and record capital investments in health, education, social development, housing, and future skills.??

All other ministries see a flat or declining budget, saving health care, education, and social services focused on their priority areas along with housing that, combined with recent federal support a flat or declining budget, saving health care, education and social services focused on their priority areas along with housing that, combined with recent federal supports, is approaching 4 billion dollars of total benefits.???

The government also allocates unprecedented resources to public capital and in-kind assets, utilizing crown land to alleviate housing costs and investing in schools through seismic upgrades.?

While introducing a fifteen-dollar per ton increase in the carbon tax, now among the world’s highest, the government maintains its stance on taxes and fees. Relief was baked into the fiscal plan across families and businesses, reducing or eliminating the health employers tax costs for small businesses, reducing electricity costs for homes and businesses, and providing one-time rebates on B.C. Hydro bills and, through the B.C. family Bonus, adding up to as much as one thousand dollars per household.??

In doing so, the Minister and her government did not increase taxes, opting for a significant eight billion dollar deficit and record capital investments. With this decision, debt servicing in 2027 is estimated to be greater than the total budget for child welfare.???

The focus remains on sustaining health care programs and implementing family affordability measures. Some adjustments to business costs, such as the increased threshold for the Health Employers’ tax, are introduced amidst the overall commitment to fiscal stability.??

Northern and Natural Resource Development and Growth?

Several factors contribute to a positive outlook for economic and resource development in the Northwest. Notably, funding initiatives are directed towards electrification and upstream gas production. Changes to the Output-Based Pricing System for industrial carbon emissions could also enable credit and sale of carbon emission reductions. This model could materially lower the carbon tax costs for some export-exposed companies and sectors, notably mining and some energy sectors. In addition, the Northwest Resource Community Alliance benefits from the receipt of 250 million dollars over five years to enable community support, which portends the government's intention to advance additional LNG projects, pipelines, electricity transmission, and Indigenous-led investments coupled with growth from the Port of Prince Rupert and Mining sectors.???

First Nations??

The government has unveiled the First Nations Equity Financing framework. While specific details are pending consultations with both businesses and Nations, there is an expectation that equity loan guarantees, reaching up to one billion dollars, will be provided. It is anticipated this will mesh with anticipated similar federal measures alluded to in the upcoming federal budget. The initial equity fund is set at 10 million dollars, reflecting capacity for current projects seeking support.?

Housing??

The government is approaching the housing crisis from multiple angles, incorporating the Build B.C. program that targets middle-class and low-income households, increases in rental stock, and measures to curb speculation. The focus extends to affordability measures for medium and low-income families, rental housing continued support for supply and rent controls and highlighted by a substantial investment in and supply to the housing market supported recently by the federal government announcement.? ?

In addition to the 2 billion dollars allocated to Build B.C., the government introduced the new B.C. Home Flipping Tax in Budget 2024. This tax aims to levy profits on properties bought and sold within two years, with certain exceptions granted for major life changes. The tax is expected to generate just forty-three million dollars. To further address housing affordability, the budget includes measures such as exempting new home buyers from the property purchase tax on the first five hundred thousand dollars of the home purchase price, up to a maximum of $835,000. Collectively, these initiatives underscore the government's approach to addressing the complexities of the housing crisis.?

Transportation?

Under the umbrella of transportation development, the B.C. 2024 budget introduces existing and 35 new infrastructure projects exceeding 50 million dollars. The majority of these projects are slated for completion by 2026, with notable exceptions being the Surrey Langley SkyTrain project and the Fraser River Tunnel project, extending their timelines into 2030.?

The budget underscores a concentrated emphasis on sustaining priority projects. These include the progression of Highway 1 initiatives spanning the Fraser Valley and extending from Kamloops to the Alberta border. These will ease congestion and enable the distribution of economic development to support the growing populations in lower mainland communities. Further investments will also support domestic and cross-border tourism. Transit-focused projects like the Broadway Subway and the Surrey Langley SkyTrain are not to be overlooked, all reflecting the government's commitment to advancing critical transportation initiatives throughout the region and eventual expansion of lines to the University of B.C. and further into the lower mainland to meet demand.?

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