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Three months before the next election, B.C. Premier Christy Clark's government has released a balanced budget that includes a significant cut to health-care premiums in the only province that still has them

B.C.'s Finance Minister released a pre-election budget that focuses on spreading the province's wealth, after half a decade of surpluses, primarily in the form of a significant cut to health-care premiums. The budget will likely form a large part of the governing Liberals' platform for the spring election campaign, when Premier Christy Clark will be seeking a fifth term for her party.

Read more: B.C. promises to cut health premiums in half with pre-election budget

Gary Mason: B.C. Liberals make re-election pitch with fifth straight balanced budget

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Related: New budget does little to help B.C. home buyers

Here is what you need to know about what's in the budget and what it says about the province's economy.

Health care

B.C. is the only province in Canada where residents are directly charged for health-care – about $900 a year for adults paying the full rate. Ontario has a form of premiums that are collected through income taxes.

The marque announcement in B.C.'s budget, which won't pass unless the Liberals win this year's election, is a pledge to cut the full rate in half. The reduction will cost about $845-million in lost premiums in the first full year.

The change will affect about two million British Columbians, while another two million people are already exempt from paying because they don't earn enough money. The government says it plans to eventually eliminate the premiums altogether, but there's no indication of when that might happen.

Health care remains the single largest item in the budget, projected to account for 41 per cent of all government spending in 2017-18. The health-care budget is projected to have increased to nearly $22-billion by 2020, about $5-billion higher than 2010.

Economic outlook

The budget is balanced for the fifth year in a row, and the province is projecting surpluses for the next three years, beginning with $295-million in 2017-18. It's a significant drop from the previous year, which is expected to end with a surplus of almost $1.5-billion, as the province uses the bulk of the difference to pay for its cut to health-care premiums.

B.C. Finance Minister Mike de Jong spent much of his budget speech bragging about the province's economy, which is projected to have the second-highest GDP growth rate – 2.1 per cent – in the country, slightly behind Ontario and tied with Alberta. B.C. is the only province to enjoy a triple-A credit rating, he said, and it has the lowest debt-to-GDP ratio in the country at 16.1 per cent.

At the same time, revenues from the energy and minerals sector continue to fall and the promise of a windfall from liquefied natural gas – a key promise in the 2013 election campaign – has yet to materialize. Forestry revenues are expected to remain relatively stable, increasing slightly to $872-million by 2019-20, but that doesn't take into account the possibility that the softwood lumber dispute with the United States could end in new tariffs that hurt B.C.'s exports.


The B.C. government spent much of the past year focusing on cooling the housing market, particularly in the Vancouver region where prices skyrocketed by 40 per cent in a single year and an average detached house fetches well over $1-million. The latest budget keeps those policies in place and expands a tax break for first-time buyers to cover homes worth up to $500,000, up from $475,000, but otherwise does not offer any significant new measures for either owners or renters. Previously announced money for affordable housing and rental units remains in place, and there is $65-million to build housing for people with mental illness and addiction.

The province introduced a 15-per-cent tax on foreign buyers in the Vancouver region this past summer, which has significantly affected that segment of the market. The proportion of buyers who were not Canadian citizens or permanent residents was about 13 per cent in the Vancouver region before the tax and about 4 per cent in December.

The latest budget projects that the foreign buyer market will continue to rebound over the next three years. The budget projects revenues from the new foreign buyer tax will represent less than 5 per cent of tax revenues from property sales in the current fiscal year and about 11 per cent by 2019-20.


A key question heading into the budget was how the province plans to deal with the fallout from a Supreme Court of Canada ruling last year related to public school teachers' contracts – but the government is putting off those decisions for later.

The court restored contract language related to classroom size and composition that the government removed through legislation in 2002, which means the province must hire hundreds of new teachers and support workers. The province reached an interim deal with the union in January that includes about $100-million a year for new hires and the budget keeps that in place for the next three years. But Mr. de Jong says negotiations are still under way on a permanent solution.

Social spending

The government announced last week that assistance rates for people with disabilities will increase by $600 a year, which advocates were quick to criticize as far too low. The latest budget reflects that increase, but does not include any similar changes for social assistance recipients. Welfare rates in B.C., which are the third-lowest among the provinces, haven't increased in a decade. The budget also includes increased funding for Community Living B.C. to support people with developmental disabilities.

The Ministry of Children and Family Services will get $287-million in increased funding. That includes $120-million to implement the recommendations from Chief Ed John, who was brought in to advise the government after the deaths of several children in government care.