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Budget 2020: New tax bracket for B.C.'s top earners, funding for students
VANCOUVER -- After a period of moderate economic growth, B.C.’s 2020 budget aims to “keep B.C. moving forward” through increased funding for students, a new tax bracket for the province’s top earners and efforts to increase housing supply.
Finance Minister Carole James delivered the NDP's third balanced budget in a row Tuesday, telling the legislature the governments new promises are about "continuing to fix the problems facing families today."
“We all want life to be more affordable,” James said.
“We all want a quality education for our kids. We all want access to health care when we need it. And we all want to feel the benefits that come with a strong provincial economy.”
Tax bracket for top earners
The 2020 budget expects significant revenue from a new tax bracket that will target the province’s top one per cent of earners.
“Today we’re asking the people at the top, the highest of the one per cent of individual income earners, to pay a little more and help B.C. provide families and communities with better services and strong infrastructure,” James said.
This new tax bracket is forecast to increase revenue from all personal income tax by 6.8 per cent in the new fiscal year.
Under the new tax rate, individuals earning more than $220,000 will be subject to a provincial personal income tax rate of 20.5 per cent, up from 16.8 per cent.
In the current fiscal year, the province expects $54 million in revenue from individuals in that earning bracket. Next fiscal year, however, revenue from the top income tax bracket is forecast to be $216 million.
New education grants
In an effort to create more opportunities for B.C. residents, the 2020 budget is offering a new needs-based grant to post-secondary students.
Last year, the province announced an end to interest on all new and existing student loans. This year, the province says it is supporting students further through the BC Access Grant.
With the new grant, low and middle-income students may be eligible for a grant up to $4,000 to help cover the costs of tuition. Students enrolled in programs that are two years or less will also be eligible.
Also in the budget, the province said its allocating new funding of $339 million over three years to improve schools for B.C.’s students in kindergarten through Grade 12.
“New schools are opening in some of our fastest growing communities, from Surrey to Fort St. John, and Chilliwack to Langley, to inspire hope, curiosity and confidence in young learners,” James said.
Few specifics were outlined for younger children, but the province said it plans to allocate $674 million this fiscal year for child care. James said the province is still “playing catch up” and is focusing on improving opportunities for early childhood educators to ensure there are enough spaces for children.
Tax on soda
Hoping to address the health of B.C.’s younger residents, the province plans to start charging PST on sweetened, carbonated beverages.
“Research shows that teens between the ages of 14 and 18 are the top consumers of pop. This is a step that health professionals and an all-party committee have long supported,” James said.
“Because this is about keeping young people healthy while taking in a bit of revenue to continue to pay for enhanced health care services for everyone.”
B.C.’s 2020 budget also says the province is investing an additional $1 billion over three years for health services. New and upgraded hospitals are expected for 13 B.C. communities, while the province is expected to continue opening urgent primary care centres, including one in Victoria and another in East Vancouver.
“We know there is nothing more important than being able to access high-quality health care when you or your loved one needs it the most,” James said. “As B.C.’s population grows and ages, we need to make sure we are ready to meet the demand.”
Little support for renters
The 2020 budget promises to build more affordable housing, but little is mentioned to help renters, except to say “government is working hard to tackle the housing crisis by … restricting rent increases.”
The budget also has $11 million set aside for the province’s public inquiry on money laundering.
“By cracking down on money laundering, stopping fraud, targeting speculators, closing loopholes, and making renting more secure, government is working to make housing more affordable for British Columbians,” the province says in its overview of the budget.
However, James said the NDP government “started where the impact was most immediate” this year.
The 2020 budget has allocated $56 million to build 200 new units of supportive modular housing for people who are homeless or at risk of homelessness.
An additional $50 million over three years is being set aside for programs and services that support people without a home or who are at risk of homelessness.
Part of that investment is expected to create more than 500 new shelter spaces province-wide. Funding will also be used to create “navigation centres,” or shelter spaces that also provide medical services and support so individuals can access permanent housing.
Funding for climate action
More funding for climate action was also announced in Tuesday’s budget, including an additional $419 million in CleanBC investments, which will go towards helping schools, universities, colleges and hospitals be more energy efficient.
An additional $20 million is being added to the province’s program to help residents purchase zero-emission vehicles.
“I’m proud to say that we have almost hit our 2025 electric vehicle target – four years ahead of schedule,” James said. “This new funding will help accelerate the clean energy program.”
The province also set aside an additional $65 million in funding to help B.C. prepare for, respond to and recover from wildfires, floods and other climate-related emergencies.
Commitments to reconciliation
In her speech, James said the province has “a lot of hard work still to do” in terms of reconciliation with Indigenous communities.
Last year, the province made a commitment to share gaming revenue with First Nations, which is expected to reach $3 billion over 25 years.
In the 2020 budget, the province is following through on that commitment to share revenue, which is expected to be $98 million in the upcoming fiscal year.
“The funds are being put to good use building a youth community centre, supporting forest management to protect peoples’ homes from wildfires and launching language programs that are key to the health of communities,” James said.
The province’s updated budget forecast predicts what James called a “modest surplus” of $203 million for the current fiscal year. But even though James said economic growth has been relatively moderate in the province, B.C. ranked among the top of the provincial real GDP rankings across the country.
“The changes we have made are all about making lives better today and creating opportunities that last a lifetime,” James said in her speech. “Opportunities to put down roots, contribute to your community and have a job that provides a good quality of life.”
With files from CTV News Vancouver’s Espe Currie