July 2 BC Chamber Public Affairs Update

Last Thursday, Finance Minister Mike de Jong introduced a budget with updated fiscal numbers. The previous budget announced in February had not been passed before the legislature was dissolved for the 2013 provincial election.

The budget released today was similar to the budget tabled in February, however, reflects some moderate changes in economic and revenue forecasts. The Economic Forecast Council has revised its projection for provincial real GDP grown in 2013 to 1.6 per cent, down from 2.1 per cent in January.

Further fuelling the lower economic projection are decreases in retails sales, job growth and housing starts. The employment growth rate was predicted to be 1.1 per cent and is now at 0.7 per cent. This equates to a difference of 9,000 fewer jobs than the previous forecast. Retail sales growth was predicted to be 3.5 per cent, but is now at 1.8 per cent. Further, housing starts were predicted to be 24,679, but are now at 23,800. A small increase was forecast in resource revenues, with the government signallying an increase in the price of natural gas.

In order to maintain a balanced budget, the government will continue its expenditure management controls: an additional $130 million in cuts to provincial spending over the next three years is being instituted; and, a core review of all government spending is targeting an additional $100 million in spending reductions and efficiencies over two years. The budget, however, does maintain new investments in early childhood development and registered education savings plans (RESPs) for children born after 2007.

Surpluses are forecast in all three years of the fiscal plan, however projections originally forecast as $197 million for this year have been decreased to $153 million, as seen below:

• $153 million in 2013-14;
• $154 million in 2014-15; and
• $446 million in 2015-16.

Last week, Linda Reid was elected Speaker of the BC Legislature.

Previously the deputy-seaker, she is concurrently the MLA for Richmond East and the longest-serving politician in Victoria.

She replaces Bill Barisoff, who retired before the election in May.

Today’s speech highlighted the re-elected BC Liberal government’s plan to implement its election commitments to secure a strong “debt-free” future for British Columbia by growing the economy and creating jobs. The speech focuses on the economy, including government commitments to fiscal management, debt reduction, job creation and development of the province’s liquefied natural gas resources for export to Asian markets.

Highlights

The following priorities were articulated in the speech:

The Economy

• A five-year freeze on income taxes and carbon tax rates
• The 2013-2014 provincial budget will be balanced and remain in balance through the government’s four-year mandate
• Tougher balanced budget legislation will be introduced
• An “accelerated BC Jobs Plan to drive growth,” including a 10-year skills training program that matches skills to jobs
• Ongoing efforts to secure non-treaty economic benefit agreements and long-term treaties and partnerships with First Nations
• A core review of all government ministries
• The creation of a new Ministry of Technology, Innovation and Citizens’ Services to foster innovation and growth in B.C.’s technology sector
• Initiatives to foster growth in the clean-energy sector

B.C. Natural Gas

• The government re-committed to advancing liquefied natural gas developments, which it says will create “tens of thousands of new jobs” and lead to the establishment of the B.C. Prosperity Fund, which will be protected by law to eliminate B.C.’s debt

Child Care and Early Years

• The government re-committed to improving access to early childhood services and improving access to and the affordability of child care
• The government will also move forward with its plan to contribute $1,200 to Registered Education Savings Plans for children born in 2007 or later

Health Care

• The Speech promises to double the number of hospice beds in British Columbia by 2020
• The Speech re-committed the government to reforming Community Living British Columbia

Education

• The government indicated that it remains committed to establishing a 10-year labour agreement with the province’s teachers

The full Throne Speech can be read here.

This weekly report produced for the BC Chamber of Commerce by Fleishman-Hillard.  While every effort has been made to ensure the accuracy of the information included in this publication as of the date of issue, events and government policies are subject to frequent change.  Therefore, the BC Chamber of Commerce and Fleishman-Hillard cannot assume any responsibility for actions taken solely or principally on the basis on the information contained herein.