The BC Liberals’ 2012 budget will restrict spending increases and maintain current tax figures to meet its balanced budget target in 2013.
“This government is making sure that they’re keeping their fiscal house in order,” said Tom Thomson, Executive Director for the Nelson Chamber of Commerce.
“From that perspective, they’re doing their job.”
On Tuesday, Finance Minister Kevin Falcon’s budget forecast a deficit of $968 million in 2012-13 and surpluses of $154 million in 2013-14 and $250 million in 2014-15.
To get there, however, the province will see several changes that may seem grim for some.
“There is a new paradigm in today’s world economic environment,” said Falcon in a press release. “It demands prudent fiscal discipline. With Budget 2012, we continue to hold the line on spending and will achieve a surplus in 2013-14, as required by law.”
Falcon’s budget will see that the government will contain spending growth to an annual average of two per cent over the next three years. While he says health and education will continue to be protected, this spending growth restriction may leave other ministries with little to work with.
“It’s always challenging in tight economic times to try and get back to balanced budgets. Health care and education continue to get some increased funding, and elsewhere there’s going to be a lot of status quo,” said Thomson, adding that while there’s “not a lot of things that people can jump up and down about,” there hasn’t been any personal income tax increases, which is always positive.
The budget will also see that the small business income tax rate be maintained at 2.5 per cent and be revisited once the fiscal situation has improved.
Additionally, a temporary one-point increase in the general corporate income tax rate to 11 per cent is included and will be effective April 1, 2014.
Thomson said that even with the slight increase, the province is still quite competitive for businesses.
“We have a very solid personal and competitive business tax regime throughout the province, even with the slight increase in the corporate tax rate for one year.”
Nelson-Creston MLA Michelle Mungall said that the Liberal government’s approach to the challenges BC is facing shows that there’s no new creative vision coming from the current government.
“I’ve been focusing mostly on the things that are going to impact everybody and their day-to-day pocketbook,” said Mungall, noting a four per cent increase in Medical Service Plan premiums that will affect every BC resident.
“It’s kind of a prudent budget,” said Thomson.
“It relieves tax payers and businesses form a lot of additional pressures and maybe helps mitigate against external risk.”