B.C. budget commits HST to pay for health-care spending

Wednesday, 03 March 2010 01:37

Victoria plans to commit every dollar raised through the HST to health services funding once the controversial tax comes into effect July 1, 2010, according to B.C. Finance Minister Colin Hansen.

The provincial government budget tabled Tuesday will increase the Ministry of Health Services' budget by more than $2 billion between 2009-10 and 2012-13. Health spending will be funded by the HST, medical services plan premiums, tobacco taxes, lottery revenue and federal transfers.

Besides dedicating HST to health-care funding, the government unveiled two initiatives targeted at helping working-class families: full-day kindergarten and a new property tax deferral program for homeowners with children under the age of 18.

Annual funding for voluntary full-day kindergarten for five-year-olds, which will be introduced in September, will rise to $129 million by 2012. Post-secondary funding remains at $1.88 billion in 2010-11.

Eligible homeowners will be allowed to defer provincial and local property taxes under a new program coming into effect in the next few months.

The province has expanded the international financial activity program to include digital-media publishing and distribution, certification and trading of carbon credits and clean technology to the list of businesses that qualify for tax reductions.

The budget includes $100 million for climate action and clean-energy development funding with an additional $35 million invested in the LiveSmart BC program for household-energy audits and energy-efficiency retrofits.

The government plans to provide $60 million over three years to a new 2010 sports and art legacy program, splitting it evenly between the two sectors.

Overall, the government predicts the economy will grow 2.2% in 2010 and 2.3% in 2011. In the "medium term," the growth rate is projected to return to 2.8%.

Annual revenue growth is expected to average 4.9% over the next three years.

Total government revenue is forecast at $39.2 billion in 2010-11, $41 billion in 2011-12 and $42.8 billion in 2012-13.

The government said improving economic conditions, higher commodity and lumber prices and increased forest harvest volumes will be the factors behind improved revenue.

Total expenses are forecast at $40.6 billion in 2010-11, $41.6 billion in 2011-12 and $42.5 billion in 2012-13.

The provincial debt is forecast to be $47.8 billion in 2010-11, $52.4 billion in 2011-12 and $55.9 billion in 2012-13. Each year of the fiscal plan includes $450 million in contingency funds. The budget projects deficits of $1.7 billion in 2010-11, $945 million in 2011-12 and $145 million in 2012-13.

The government has pledged to return to balanced budgets by 2013-14.

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