Budget 2019: Parents to start receiving B.C.'s child tax credit for 18 years
The latest B.C. budget promises a major expansion of the province’s child tax credit, funding for schools and hospitals, and an immediate end to student loan interest - but no action on the NDP’s election promise of $10-a-day child care.
Finance Minister Carole James delivered the balanced 2019 budget Tuesday, promising to “put money back in people’s pockets” through some lowered costs and increased benefits.
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The giveaways are possible because the province’s economy is among the strongest in Canada, the minister said, with surpluses of $274 million, $287 million and $585 million forecast over the next three years.
“A truly prosperous economy needs to work for everyone. It needs to make life better for people today, and ensure our children have the opportunities they need to meet the challenges of tomorrow,” James said in her budget speech.
Expanded child tax credit
Possibly the biggest new perk for families is the B.C. Child Opportunity Benefit, a refundable tax credit that will replace the province’s existing Early Childhood Tax Benefit, though not until October 2020.
Unlike the current credit, which is only eligible for children up to the age of six, the new benefit will be handed out until children turn 18.
“That means once the new benefit is in place, a family will receive as much as $28,800 from when the baby is born until adulthood,” the government’s budget plan reads. “For a family with two children, support can easily surpass $40,000 for a family.”
Altogether, the province estimates 290,000 families will take advantage of the credit, at cost of about $400 million annually.
The maximum benefits offered - $1,600 a year for parents’ first child, $1,000 for their second, and $800 for each additional child - will only be for families whose net income is $25,000 or less.
The benefits are scaled down for families earning more, so that parents whose net income is $47,500-$80,000 will take home $700 a year for their first child.
Single-child families earning about $97,500 and two-child families making $114,500 won’t receiving anything under the benefit.
End to student loan interest
The province also offered relief for former students still struggling to pay off their student loan debt, announcing an end to interest on all new and existing loans, effective Tuesday.
The move is expected to save about $2,300 in interest payments over 10 years for people carrying $28,000 in combined provincial and federal loans.
“Higher education should open doors, not make it harder to get ahead,” B.C. said in its budget plan.
There is also new money for improving health care and education, including $1.3 billion over three years that will help build, renovate and expand hospitals and $2.7 billion to maintain, replace and renovate schools.
Burnaby North Secondary, Mountainside Secondary in North Vancouver, Sullivan Heights Secondary in Surrey and South Side Area Elementary-Middle in Chilliwack are all among the 10 schools benefiting from the funding.
Additionally, B.C. announced it’s increasing assistance payments for the second time since forming government, with a hike of $50 a month, and putting $9 million toward the implementation of ride-hailing, which the NDP has promised to do this fall after several lengthy delays.
Reconciliation and green initiatives
Also announced in Tuesday’s budget is a new gaming revenue sharing agreement with B.C. First Nations that will provide every community with between $250,000 and $2 million annually, at a total cost of about $3 billion over 25 years.
The government said First Nations will determine their own priorities for the funding, but that it could potentially go toward housing, infrastructure or cultural revitalization.
In a statement, Kukpi7 Judy Wilson of the Union of B.C. Indian Chief called the agreement “an important step in recognizing the economic component to Indigenous inherent title and self-determination to make our own decisions about our territories.”
B.C. also pledged $902 million toward its recently announced CleanBC program, which aims to decrease carbon pollution by 18.9 megatons by the year 2030.
The funding includes $223 million to increase the carbon tax credit by 14 per cent for children and adults, giving low- and middle-income families up to $400 this year.
Still no $10 child care, renter’s rebate
When it comes to child care, the province has only promised another $27 million to support the affordability programs introduced in its previous budget.
James noted the NDP’s child care plans are being “phased in over time,” and pointed to the more than $1 billion committed in 2018, which is already being used to help many eligible families save up to $350 a month per child.
But none of the new money earmarked in Tuesday’s budget is intended to expand the pilot projects currently underway testing out $10-a-day child care across the province.
There is also no mention of the promised $400 rebate for renters, though James said the government hasn’t given up on its promise.
“It is something we’re working on with our Green colleagues,” James said, pointing to “a number of moves” already implemented to help tenants.
One new program in Tuesday’s budget is B.C.’s first provincially funded rent bank program, which will provide last-minute relief to struggling tenants.
“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 in her speech.
The government’s updated budget forecast predicts increasing revenue reaching $62.5 billion in the 2021-22 fiscal year, despite a number of risk factors, including BC Hydro losses and what Attorney General David Eby has described as the ongoing “financial dumpster fire” at ICBC.
Despite a projected loss of over $1 billion at the public insurer this year, the government is expecting ICBC will be in the black to the tune of $86 million by 2020/21, following a number of changes to injury payouts and the settlement process.
The province is also expecting to collect more than twice as much in speculation tax over the next year, from $87 million in 2018-19 to $185 million in 2019-20, despite the current slowdown in the real estate market. The Ministry of Finance said the hike is anticipated because the tax only came into effect last year.
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