The BC Government’s budget calls for Medical Services Plan (MSP) Premiums to be cut in half for some British Columbians on the road to eliminating MSP all together.

That’s among the highlights in the budget introduced by Finance Minister Mike de Jong, which outlined a small business tax cut from 2.5% down to 2% and the phasing out of PST on electricity.

“PAYING BACK TAXPAYERS” WITH MSP CUTS

In the government’s Throne Speech they pledged to pay back taxpayers for years of fiscal restraint. Now we know they plan to do that through cuts to MSP. Exactly how it affects you depends on your income. It’s complicated.

For starters, about two million British Columbians already don’t pay MSP because they’re in a lower income category. But that threshold is being changed so you can now earn more and still be exempt. For example, you will now be able to make up to $26,000 as an individual and $35,000 as a family with two children without paying MSP.

For anyone making enough to pay MPS, your premiums are being cut in half – as long as you make less than $120,000 as an individual or family. If that sounds complicated already, you’ll also have to register for this MSP cut. The government says those details will be revealed later.

The government says this is the first step towards eliminating MSP premiums all together but they did not provide a timeline for when that would happen. The minister says that will depend on the financial state of the province in future years.

BUSINESSES

The small business corporate income tax rate is being cut from 2.5% down to 2%

The provincial sales tax (PST) that businesses pay on electricity is being cut and eventually eliminated. Starting in October, the rate drops from 7% to 3.5%. But 2019 it will be 0%. The head of Catalyst Paper, with mills in Crofton and Port Alberni on Vancouver Island, says this will be a big boost for his mills.

SURPLUS REDUCED

Earlier forecasts pegged BC’s budget surplus at $2.2-billion dollars. In this updated budget that surplus decreased to about $1.5-billion for the current fiscal year. Where did that money go? The finance minister says it went in a number of directions, from infrastructure projects to forest rehabilitation to housing and shelter activity.

EDUCATION AND TEACHERS

The recent class size and composition court victory by the BC Teachers Federation had a lot of people wondering how a boom in hiring teachers would impact the government’s bottom line. The Finance Minister was quick to stress that those numbers won’t be final until negotiations with the BCTF is finished. But, in the big picture, the new budget includes a $740-million dollars boost to K-12 education funding over three years. Much of that goes to fund enrollment growth, salary costs, and other increases but there is $320-million for towards the final agreement on class size and composition.

TIDBITS

The government will increase the threshold for the first time homebuyer’s exemption to $500,000, saving those buyers on the property transfer tax. The government has also earmarked over $700-million dollars for their previously announced mortgage assistance loan program.

$199-million over three years to increase disability assistance rates. For the individual, that means a $50 a month increase starting this April.

There is no increase to welfare rates. Individuals on welfare will continue to get $610 a month.

The government has set aside $20-million in grant money for the coming 2017/18 fiscal year to create 2,000 new child care spaces. This is in addition to an existing grant program for licensed daycare providers to create spaces.

And if you’re a camper, there’s money to create 1,900 more campsites in the BC parks system but where exactly those are going isn’t yet known.

THE BIG NUMBERS

$50.193-billion – how much the government thinks it will cost to run province in 2017/2018.



$50.838-billion – how much revenue the government forecasts in 2017/2018, leaving a projected surplus of $295-million.

$43.3-billion – The prediction for how much debt BC will have at the end of 2017/2018. Most of it is infrastructure debt. The government has been steadily increasing infrastructure debt over the last 10 years. It’s nearly double what it was 2007/2008. Despite “balanced” budgets in operating expense, the government is still borrowing heavily for infrastructure.