The Globe and Mail

February 25, 2024
CHAD HIPOLITO/The Canadian Press

Good morning. Wendy Cox in Vancouver this morning.

In April, 2021, the B.C. government brought in its first budget following a full year of the economic and social upheaval caused by the pandemic. The fiscal plan, driven by health spending at record heights and worldwide economic uncertainty, predicted an unprecedented deficit of $9.7-billion on a $64.3-billion budget.

Then finance minister Selina Robinson estimated it would take seven to eight years to return to a balanced budget.

Instead, when the books for 2021-22 were tallied, British Columbia ended the year with a $1.3-billion surplus.

Anyone concerned about the province’s debt and deficit situation might hope for a similar turnabout for the end of 2024-25.

In the budget released Thursday, Premier David Eby’s NDP expects to overspend by $7.9-billion on an $89.4-billion budget. If that deficit figure is realized, it would be the highest the province has recorded. And it would have done so without a seismic event such as a global pandemic.

Finance Minister Katrine Conroy dispensed with an estimation of when the books might return to balance. She noted repeatedly that “now is not the time,” with high interest rates, a housing crisis, a slower global economy and inflation, for spending cuts or dramatic tax increases.

Whenever is the right time isn’t soon. Budgets delivered in election years are definitely not the time to curtail offerings such as the two one-time rebates in this year’s budget. Electricity customers will receive a 4.6-per-cent credit on their bills, starting in April, though that return will be tempered by a 2.3-per-cent annual rate hike approved for BC Hydro. Still, for individual families, the savings are expected to add up to about $100 over the year. For large industrial customers, however, the savings will be substantial – for an average mining operation, the credit will be worth more than $200,000.

The monthly B.C. Family Benefit will be increased, as a one-time measure, by 25 per cent in 2024. About 340,000 families will be eligible for the means-tested program, and a qualifying family of four will receive an annual benefit of $1,760.

In other measures, more businesses will be excused from paying the employer health tax, as the exemption threshold rises, from a payroll of $500,000, to $1-million.

Resources for fighting forest fires will grow, along with support for people who are evacuated. The province is also boosting programs to reduce flood risks and improve drought resiliency.

Expanding on the string of initiatives announced in recent months designed to tackle the housing crisis, B.C. will be the first province since the 1970s to introduce a flipping tax on home sales. Beginning at the start of next year, this 20-per-cent penalty will apply to homes sold within a year and declines to zero for properties unloaded after two years. This levy, which provincial bureaucrats estimate will apply to less than 10,000 annual transactions, layers on top of the new federal flipping tax on units sold within a year.

This year’s budget deficit, followed by similar overspends in the next two years of $7.7-billion and $6.3-billion, will contribute to soaring debt. Provincial debt has doubled since the New Democratic Party formed government in 2017.

Kevin Falcon, leader of the BC United opposition, said he expects the province will see its vaunted triple-A credit rating downgraded as a result of the fiscal plan.

“This is the worst example of reckless spending I have ever seen in a government budget,” he told reporters. “At the same time we’re getting the worst outcomes we’ve ever seen in health care, in public safety, in drug overdose death rates, in housing affordability – in every area the provincial government is responsible for.”

Bridgitte Anderson, CEO of the Greater Vancouver Board of Trade, said the debt numbers are troubling. “We are concerned about what we are seeing for the future of our province when it comes to debt and deficit,” she said. “We know services need investment, but concerns remain about where the economic growth is going to come from.”

The Finance Minister said the province’s debt load is favourable compared with other large provinces.

“Our debt burden remains manageable,” she said. The province’s interest costs as a percentage of government revenue are less than half of that paid by Ontario and Quebec, she said.

This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief Mark Iype. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.

British Columbia

Tijana Martin/The Globe and Mail

British Columbia’s NDP government has poured billions of dollars into creating new homes as part of its effort to improve the affordability of housing, the biggest financial pain point for many residents of the province.

But as the seven-year-old government heads for a fall election, it is facing significant difficulty in making a difference that is visible to voters. That’s despite huge amounts of money promised this year and in previous years, including in this week’s provincial budget, as well as a slew of new legislation aimed at encouraging denser housing in cities.

“We’re leaving no stone unturned in terms of building the housing that we need,” Premier David Eby told a Greater Vancouver Board of Trade gathering on Friday afternoon. “But there’s a basic math challenge that we’re facing here in the province, which is dramatic population growth and the housing supply is not keeping up with it.”

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Alberta

Carrie Tait/The Globe and Mail

Nel Keith joined Bow Valley Credit Union 28 years ago, because she wanted to support a local institution rather than a big bank. On Friday, she and her husband, Bruce, joined their first protest, on the sidewalk outside BVCU’s Canmore branch.

The Keiths, along with about 40 others in this mountain town, rallied to register their dismay with BVCU’s embrace of right-wing ideals, including aligning with organizations such as Take Back Alberta and sponsoring U.S. provocateur Tucker Carlson’s visit to the province.

Brett Oland, BVCU’s chief executive, sat at a table outside the branch, with demonstrators forming a semi-circle in front of him.

The Keiths said they are in the process of taking their business elsewhere, a common theme at the protest. The group represents a tiny fraction of BVCU’s 10,000 members, but the tension over the financial institution’s values reflects Alberta’s gaping political divide.

“It is way too far right for me,” Ms. Keith said of BVCU in an interview at the protest. “And I find it very upsetting that I am associated with a bank like that.”

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Manitoba and Saskatchewan

Chelsea Cowell/Facebook

Lawyers representing a 29-year-old man accused by Manitoba RCMP of killing his common-law partner, their three young children and teenage niece in a rural community southwest of Winnipeg are requesting a mental-health assessment from a provincial court to determine whether he is fit to stand trial.

The accused, Ryan Howard Manoakeesick, has been charged with five counts of first-degree murder. At a brief proceeding before a justice of the peace at a Winnipeg court on Friday, Aiyana McKenzie, an articling student from Wolson Roitenberg Robinson Wolson Minuk, the law firm that is defending Mr. Manoakeesick, requested a date for the assessment.

Mr. Manoakeesick was not present for the hearing. The court is expected to reconvene on the matter on Monday.

On Feb. 11, RCMP discovered Mr. Manoakeesick’s 30-year-old partner, Amanda Clearwater, lying dead in a ditch on a highway, a few kilometres away from their home in Carman, Man.

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Real estate

James Lloyd/James Lloyd

Tensions between tenants and landlords could worsen if robust regulations aren’t introduced as the push for density continues, say housing experts and advocates. B.C.’s moves to boost density around transit hubs and throughout so-called single-family zoned areas of the province must be introduced in tandem with better tenant protections, heard a panel at the Union of B.C. Municipalities (UBCM) last week.

Those protections are just not there, and with all the redevelopment under way in the next couple of decades, displacement will increasingly become a fact of life for many Lower Mainland renters, in particular.

In Vancouver, the city has policies to advance density along the Broadway corridor, north to 1st Avenue and as far south as 16th Avenue, bordered by Clark Drive to the east and Vine Street to the west. That 500-block area contains one-quarter of the city’s rental stock, the majority of which is more than 50 years old. Within that area is a seven-unit, three-storey structure built more than 100 years ago, on a 50-foot residential lot that is about a 15-minute walk to the Commercial-Broadway SkyTrain station.

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Life & Arts

iStockPhoto / Getty Images

Last August, as wildfires raged across British Columbia, Premier David Eby told tourists planning trips to the Okanagan region to stay away. “The last thing we need is disaster tourists interfering with rescue efforts,” he said.

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opinion

Kayle Neis/The Canadian Press

Andrew Leach is a professor of law and economics and co-director of the Institute for Public Economics at the University of Alberta.

Saskatchewan, in trying to defy the federal carbon tax, has come up with a bold set of legal machinations.

Bold, that is, in the way a child jumping their checker diagonally across the board in one giant leap and yelling “King me!” is bold.

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