The September Budget Update shows the progress B.C. has made since the February 2005 Budget and confirms that we are on our way to a future of growth, confidence and opportunity.
Driven by a robust economy, British Columbia's fiscal outlook is stronger than previously forecast. The improved outlook allows the government to build on its February budget commitments with new measures to support senior citizens, to build a new relationship with First Nations, and to reduce taxes to help keep our economy competitive and support job creation.
New measures to improve the lives of senior citizens are at the heart of the September Budget Update, which provides an additional $242 million over three years to:
Seniors currently make up 14 per cent of the B.C. population. By 2031, that proportion will rise to 23 per cent. In addition to improving supports for senior citizens, the government has formed a Premier's Advisory Council on Aging and Seniors' Issues to consult with British Columbians and help ensure that seniors in our province receive the support and services they need to continue living full, rewarding lives.
Building a New Relationship with First Nations
The September Budget Update advances the government's commitment to build a new relationship with First Nations by allocating $100 million of one-time funding to a First Nations New Relationship Fund. The Fund will support capacity building initiatives that will assist First Nations communities to be effective partners in consultations concerning the use of land and resources.
Too often, funding from all levels of government is focused on short term priorities and needs, resulting in reliance on third party expertise. The Fund will invest in First Nations communities to advance training and skills development, to create lasting growth, prosperity and true-self reliance.
Enhancing B.C.'s Competitiveness
In addition to confirming February's tax reductions, which include significant measures targeted to low and modest income earners, the budget update provides new measures to enhance British Columbia's economic competitiveness and support job creation. These include:
After leading the provinces in 2004 with growth of 3.9 per cent, British Columbia's economy continues to perform impressively in 2005, with positive momentum in employment, consumer spending, non-residential investment, and continued robust levels of home construction as well as consumer and business confidence.
The Ministry of Finance improved its economic forecast to 3.4 per cent real GDP growth for 2005, 3.2 per cent in 2006, and 3.1 per cent for 2007 to 2009.
In keeping with the improved economic outlook, the updated fiscal plan forecasts surpluses of $1.3 billion this year, $600 million next year and $400 million in 2007/08. The healthier surplus track helps to reduce the province's capital infrastructure borrowing requirements and improves the debt outlook compared to the February budget forecast.
To meet the transportation, health, and education needs of a growing province, the province's capital infrastructure plan includes a three-year increase of $1.1 billion compared to the February budget. This is due mainly to increased investments in the post-secondary and health sectors.
The budget update provides for investments of $4.2 billion in both 2005/06 and 2006/07, and $3.7 billion in 2007/08, for total capital spending of $12.1 billion over the three-year fiscal plan.
The province's infrastructure investments are funded through new borrowing. The larger fiscal plan surpluses will help reduce the province's borrowing requirements, resulting in an improved debt forecast.
Total provincial debt is now forecast at $35.9 billion in 2005/06, $37.3 in 2006/07 and $38 billion in 2007/08. The total debt forecast for 2007/08 is now $1.6 billion lower than in the February budget.
Similarly, the taxpayer-supported debt-to-GDP ratio, a key measure of debt affordability, is also lower than previously forecast. Taxpayer-supported debt-to-GDP is forecast to decline to 17.1 per cent in 2005/06, 16.7 per cent in 2006/07 and 15.8 per cent in 2007/08.
To ensure budget surplus targets are met, the updated plan includes forecast allowances of $300 million in 2005/06, $600 million in 2006/07, and $900 million in 2007/08. These allowances will help protect the fiscal plan from revenue risks such as sudden drops in commodity prices, the cost of natural disasters, and other unexpected events. The forecast allowances also cover potential wage and benefit increases arising from the next round of public sector bargaining.
Education and literacy are keys to progress – for individuals and for our province. They help set a course for success in school, at work and throughout our lives, and foster innovations that benefit our society, economy and quality of life.
The September Budget Update supports the highest education budget and the highest per-pupil funding in British Columbia history. It also commits $329 million over three years from the federal government to new early learning and child care programs, improving access to quality child care for groups such as lower income families, aboriginal people and children with special needs.
The September Budget Update recommits $268 million in funding over three years to the Ministry of Education. Funding to districts for the 2005/06 school year is rising by $150 million — the single largest funding increase in a decade.
This will improve access to school libraries and quality learning resources, music and arts programs, and resources to support every special needs student.
The September Budget Update builds on the February budget with an additional $15 million in 2005/06 to expand the number of post-secondary seats and help keep tuition fees affordable. Including the February commitments, funding for post-secondary education will increase by $386 million over three years to help create 16,205 new post-secondary seats by 2007/08 with an overall goal to add 25,000 new seats by 2010.
The September Budget Update maintains the commitment to provide $450 million over three years for student financial assistance, including loan reductions for students in need, debt relief, a loan forgiveness program and grants for students with disabilities.
The September Budget Update recommits an additional $12 million over three years to public libraries across B.C. for new programs and initiatives including broadband Internet access, a 24-hour virtual reference desk and a one-card system to give people access to books in any B.C. library. The BC Arts Council will also receive an additional $9 million over three years for grants to support arts and culture organizations throughout the province.
The September Budget Update reaffirms funding for a wide range of programs and services that support and encourage British Columbians to lead healthy, active lives.
The province will invest an additional $1.5 billion in health care and fitness initiatives by 2007/08, the largest increase for any government function. Health spending continues to grow every year and has increased by 32 per cent over the past five years.
The September Budget Update supports the three-year plan to improve access to critical services such as cancer care, cardiac care, joint replacements and sight restoration, through an additional:
The September Budget Update confirms the plan to provide an additional $73 million for infant and early childhood vision, dental and hearing screening. It also supports the promotion of physical fitness and healthy communities with $50 million for regional sports facilities and $60 million for major post-secondary sports training facilities.
The September Budget Update confirms the February 2005 Budget commitments and introduces new measures to help British Columbia realize its full potential as the best place on Earth to raise a family; to live and play; to work, invest and get ahead. To guide our progress, the government has set out five great goals for the decade ahead.
Everyone deserves an opportunity to live a full, rewarding life and to achieve their potential. The September Budget Update enhances the February budget plan to protect and improve the quality of life for British Columbians most in need with $242 million in new funding to improve support for senior citizens.
These new measures include:
These new measures build on the February Budget plan, which provided additional funding over three years of:
Since 2001, the B.C. income assistance caseload has changed significantly. The number of people receiving temporary assistance has fallen as employable people have moved into the workforce, and more support has been directed to those with disabilities.
A healthy environment is critical to a healthy lifestyle. The September Budget Update confirms additional funding to preserve and protect the natural surroundings that help define our province to the world.
These initiatives include three year funding of:
The September Budget Update reaffirms the plan to encourage the development and use of cleaner, alternative energy sources with targeted tax changes, including:
After leading the provinces in 2004 with growth of 3.9 per cent, British Columbia's economy continues to perform impressively in 2005, with positive momentum in employment, consumer spending, home construction and non-residential investment, and continued robust levels of home construction as well as consumer and business confidence.
The September Budget Update provides new measures to keep B.C.'s economy strong and support job creation:
These new measures build on those in the February budget, which include:
The September Budget Update confirms tax reductions for lower and moderate income British Columbians, measures to keep home ownership affordable, and increased funding to keep our families safe and strengthen our communities.
British Columbians at lower and moderate income levels now pay the lowest income taxes in Canada. Recent tax reductions include:
A senior couple with an income of $30,000 will now pay almost $930 less in total provincial tax than in 2001.
A family of four earning $30,000 will now pay almost $1,300 less in total provincial tax than in 2001.
The September Budget Update reaffirms the three-year plan for strong, secure communities introduced in the February Budget, which provided additional funding over three years for community infrastructure and safety, including: