The Liberal government committed to a 10-year transportation plan for British Columbia in its last Throne Speech, a pledge that suggested a vision beyond the current skirmish over transit in the Lower Mainland, but there was little indication from Tuesday’s budget about what the plan might hold.
Funds for new light rail to Surrey or a SkyTrain connection to the University of British Columbia weren’t in Tuesday’s budget. There was also little money set aside to build new infrastructure to support a liquified natural gas boom expected across the north of the province.
With many of the Liberals’ marquee transportation projects nearly complete, department officials said the new decade-long transportation plan should be unveiled some time in the next year. However, that came as little relief for those looking for a clear vision for transportation.
“There are a lot of things missing in this budget. Where’s the money for new made-in-B.C. ferries or new light rail?” asked Phil Venoit, president of the Vancouver Island branch of the B.C. trades council.
The only new major transportation project to get any dedicated funds in the budget was the planned replacement of the Massey Tunnel. More than $71-million was set aside to prepare the project.
The tunnel joining Richmond and Delta was opened by the Queen in 1959. Now it’s one of the main bottlenecks around Vancouver. Construction of a replacement bridge is scheduled to begin in 2017.
While few details are available on the bridge, the government has indicated in the past that the Port Mann Bridge could serve as an inspiration for the new structure.
The budget also included $299-million over the next three years to finish the construction of the SkyTrain’s Evergreen line. Already under construction, the line will link downtown Vancouver to the sprawling suburbs east of the city.
“I expected to see more of a hint of the government’s priorities in the budget,” said Iain Black, president of the Vancouver Board of Trade. “The future of the Lower Mainland relies on being able to move people and goods easily and efficiently.”
With only a $184-million surplus expected in the coming year, the government hasn’t given itself a thick financial margin with which it could fund large future projects.
According to Mr. Black, more details could emerge from the government in the next few weeks. “This is the time to act,” he said, referring to last week’s announcement of $14-billion in new infrastructure funds by Prime Minister Stephen Harper.
Part of the New Building Canada Plan, a $53-billion fund conceived to deal with gridlock and sinkholes across the country, will soon be available for projects such as those being fought over in the Lower Mainland and elsewhere in the province.
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By the numbers
“We continue to balance on a razor’s edge.” – Mike de Jong
The province projects a budget surplus of $175-million for the fiscal year ending this March, fulfilling the Liberals’ election pledge. The surplus is somewhat more than what Mr. de Jong predicted at the end of the third quarter – $165-million – but it is smaller than the $197-million surplus projected in last February’s budget.
The budget surplus for the upcoming year is forecast to be $184-million. Economic growth is expected to be two per cent.
The provincial debt for 2014-2015 is projected to be $64.7-billion.
“I don’t want to suggest a cascade of dollars flowing into the Prosperity Fund in the next five years.” – Mike de Jong, referring to the fund established last year to use profits from liquefied natural gas for, among other things, paying down provincial debt
Last year, British Columbia had promised to outline how it planned to levy taxes to realize the government’s much-touted dream of LNG riches, leading to a debt-free province. But Mr. de Jong was forced to admit the complexities of coming up with the regime mean the details will not be available until fall.
The government does not expect the first plant to begin production until 2018, and revenues are not expected to begin until after that.
Tuesday’s budget included the structure of how that tax regime will work: a two-tier system with a 1.5-per-cent tax applying for the first three years, transitioning to a tax of up to seven per cent by the sixth year and beyond.
The exact tax rate for the second phase will be introduced in the fall after an assessment of global and provincial conditions.
Measures for individuals
“Admittedly, the tax relief in this budget is pretty thin.” – Mike de Jong
In an effort to get into the black and to bolster an election campaign based on a balanced budget, the Liberal government introduced several new taxes on individuals last year.
The 2014-2015 plan has fewer of those. Medical Services Premiums, boosted last year, continue the pre-arranged climb. Effective Jan. 1, 2015, the premiums will rise by about four per cent, amounting to about $5.50 a month for a family of three or more.
Tobacco taxes will rise as of April 1 by 32 cents per pack. That is over and above the increase announced last week in the federal budget.
The B.C. Training and Education Savings Grant – a one-time payment for children born in B.C. in 2007 or later and whose parents have contributed to a registered education savings plan – kicks in with payments of $1,200 per child by the end of the coming fiscal year.
As well, starting in April 2014, the B.C. Early Childhood Tax Benefit of $55 per month per child under the age of six will begin to be paid out. The benefit is income-tested.
“We’re not going to ask taxpayers to shoulder this burden on their own. We see the potential for partnerships with the industrial sector.” – Mike de Jong on skills training
Funding for advanced education actually drops by just over $16-million, which the government says is a result of finding efficiencies and not cutting student services. Critics, however, question whether the number can reflect the government’s stated priority on skills development.
Provincial funding for Kindergarten to Grade 12 nudges up barely, with a $22-million increase over last year.
The spending estimates make no provision for higher expenses due to a judge’s ruling last month ordering the province to reinstate contract language for teachers that was in place prior to 2002. The language, wiped out by the Liberals, dictated class sizes and composition, and Education Minister Peter Fassbender has said following the ruling would cost $1-billion.
The province has filed its intention to appeal. If it loses, the money to pay for it this year would wipe out the $300-million contingency fund intended for unforeseen disasters such as forest fires and floods.
“We have more work to do.” – Mike de Jong on job creation
The government is devoting $29-million over three years to push the LNG strategy forward.
Another $9-million has been pledged for environmental assessments of resource development of proposed LNG facilities, as well as pipelines, mining and other major projects.
The province has also underlined a commitment of $5-million over five years to the Aerospace Association of Canada Pacific Division.
Still, Mr. de Jong acknowledged jobs growth isn’t where the province would like it to be, noting that though employment has been stable, job growth has been flat.