Province Législature Session Type de discours Date du discours Locuteur Fonction du locuteur Parti politique Colombie-Britannique 39e 3e Discours du budget 15 février 2011 Colin Hansen Minister of Finance British Columbia Liberal Party Today I present Budget 2011. As we promised, given the times that we are in, this can best be described as a status quo budget. It provides the government with spending authority to manage the province's affairs for the coming year. However, it does not set out new directions. That will be in the purview of the next Premier, who will set the course for the next decade of growth and opportunity for this great province. Compared to the previous four budgets that I have had the honour of delivering in this House, I cannot describe this budget as exciting, but it comes at an extraordinary, exciting time in B.C.'s history. In 11 days we will know who the next Premier of British Columbia will be, and soon we will also have a new Leader of the Official Opposition. Later this year the people of B.C. will have their say in a referendum on whether we should keep the harmonized sales tax or go back to the old PST-GST system. With all of these critical developments yet to come, a status quo budget is the prudent way to go. And today I can confirm that thanks to the work and achievement of the past ten years, we have built a strong foundation for the decade ahead. British Columbia has weathered the impacts of the recent recession better than almost any other jurisdiction. Look at what's happening south of the border, where more than seven million jobs have disappeared since 2007 and housing values are expected to remain depressed for years to come. Look at what's happening in places like Ireland and Greece, where government finances are in absolute turmoil. They're being forced to slash programs and cut public sector wages and benefits. Meanwhile, here at home things are looking positive. We've come through the worst economic downturn of our generation without significant permanent damage to the province's economy. Even during the worst of the recession we fared better than most other places, including other Canadian provinces. In 2009 our economy shrank by 1.8 percent, but that was compared to a 2.5 percent decline for Canada as a whole. Growth picked up in 2010, at 3.1 percent, and we're seeing positive indicators across a wide range of sectors. Exports, housing starts, retail sales and tourism numbers are all on the rise. Mining is back in a big way, with mineral exploration spending now more than ten times higher than it was at the end of the 1990s. Thanks in part to our accelerated infrastructure program, construction activity surged in the past two years. Employment numbers, while still showing month-to-month ups and downs, have almost returned to pre-recession levels. That doesn't mean we don't face challenges. We still have work to do to strengthen our economy. But we are on track as per the five-year plan we introduced in September of 2009 to get back to balanced budgets by 2013. We expect the B.C. economy to grow by 2 percent in 2011, by 2.6 percent the following year and by 2.7 percent in 2013. These estimates are below the average of private sector forecasts, consistent with our always conservative approach to budgeting and forecasting. In the next three years as the economy continues to gain strength and commodity prices recover, we expect revenues to grow by an annual rate of 3.4 percent with annual spending growth limited to 2 percent, which will require continued fiscal discipline. With revenues rising faster than spending, the deficit will be eliminated. It is now forecast at $1.265 billion for the fiscal year just ending. That's over 25 percent lower than the $1.715 billion we forecast in last year's budget. The deficit will fall to $925 million in the coming year and fall again to $440 million in 2012. For 2013 we are projecting a surplus of $175 million. Our estimates include both contingencies to help manage unexpected pressures and a yearly forecast allowance to protect against unforeseen events. These levels of prudence are collectively valued at more than $2.5 billion. That includes contingencies of $600 million in the year ahead and $450 million in each of the two following years. It also includes a forecast allowance of $350 million for each of the next three years. Taxpayer-supported debt will increase, but in the context of the economic growth, it will remain affordable. The debt-to-GDP ratio, the key measure of debt affordability, is forecast to remain below 18 percent. It is vitally important that the province's debt remain affordable. Before the recession we had managed to reduce debt-to-GDP ratio to 13.4 percent from a high of over 21 percent, and that helped ensure that we had room to manoeuvre. Because we've managed prudently, because in the good times we used extra revenues to pay down the debt, we were well positioned when times got tougher. In 2008 when the impacts of the global economic collapse became clear, we were able to accelerate our infrastructure program to create and sustain thousands of jobs across British Columbia at a time when jobs were desperately needed. Since then, we have committed $5.5 billion to about 900 accelerated infrastructure projects, creating and protecting approximately 35,000 construction jobs. These were definitely not make-work projects. They included building social housing, hospitals, transportation, schools and community facilities — the infrastructure that underpins our quality of life. They also built on the work we've done through the last decade to open up our province, attract new investment and support public services. Since 2001 capital spending on infrastructure totals more than $45 billion, and that includes approximately $7 billion for health care facilities, equipment and information management systems; another $7 billion for post-secondary education facilities; almost $4 billion for schools in the K-to-12 system; nearly $8 billion for transportation infrastructure, including a major expansion of public transit; over $14 billion by commercial Crown corporations for electrical generation, transmission and distribution projects and the Port Mann bridge/Highway 1 project. Through the Pacific Gateway alliance, we are also working with partners in the private and public sectors to undertake a $22 billion expansion of port, rail, roads and airport facilities, helping to build B.C.'s reputation as the preferred gateway for Asia-Pacific trade. We also continue working towards a stronger, more vibrant forest industry, recognizing its central role in supporting so many families and communities. More than a hundred actions recommended by the Working Round Table on Forestry are now underway or completed, helping the sector take advantage of the improving global economy. We expect revenue from the forest industry to increase by more than $100 million in the year ahead. Although that is still below historical levels, it appears that the industry is on its way to a healthy economic recovery. The government can't take all the credit for our strengthening economy. We don't create jobs; businesses do. It's the employers, the workers and the innovators out there in all our communities to whom the credit must go. At the same time, the government has worked hard to create an environment where businesses can not only thrive but play to win in an increasingly competitive global marketplace. That's why we've done so much to streamline and simplify regulatory requirements. Just last month the province was recognized as leading the country in this regard after reducing red tape by 42 percent since 2001. We also continue to ensure that we have a competitive tax environment for individuals and families as well as for businesses. Since 2001 most British Columbians have had their provincial personal income taxes reduced by 37 percent or more, and an additional 325,000 people no longer pay any B.C. income tax. As a result, we now have the nation's lowest provincial personal income taxes for individuals earning up to $119,000 a year. We have also seen, in the last ten years, significant growth in our standard of living after years of decline in the 1990s. That's not the only reversal we've seen, nor is it the only one that we can take pride in. Towards the end of the 1990s tens of thousands of British Columbians left this province in search of work. Now many of those same people have come home because in the last ten years we've seen B.C. regain its rightful role as a place where they can find jobs and build a future for their families. They came back, and thousands more moved here because we made B.C. a place where young entrepreneurs, investors and business owners were once again welcome, because they are the job creators. Once again, we saw a province where young people could live their dreams, start a small business and see it succeed. With this budget, we are reaffirming our commitment to support small business. Today I can confirm that, as promised, we will lower our small business tax rate to zero percent by April 1 of 2012. We also have, along with Alberta, the nation's lowest general corporate income tax rate. That is yet another reason that companies continue to come to B.C. Keeping taxes low is an essential part of our plan to encourage job creation, attract new investment and keep our economy moving forward. With this budget, we are also moving forward with our efforts to improve public services. We're maintaining the record-high level of investment in health care and education that we set out in our last budget. We are also allocating an additional $605 million to health care in 2013, for a total increase of almost $2 billion compared to 2010. Of that, $1.4 billion more will go to the health authorities and other service delivery partners for front-line services. An additional $438 million will go to the Medical Services Plan for physician and laboratory services, and $144 million will be added to the PharmaCare budget. These investments maintain existing programs and directions, including our ongoing efforts to increase innovation and efficiency. On the topic of efficiency, our health care system is delivering very good results. B.C.'s per-capita costs are among the lowest in the country. There are critics who will say that that's a bad thing, but you cannot measure the success of a health care system based on how many taxpayers' dollars are spent. Success must be measured on the basis of outcomes and the health of the citizens being served. On that score, B.C.'s health care system is one of the most successful anywhere.  Even as we keep our per-capita spending under control, we have among the best health outcomes in the country. For example, compared to other provinces, B.C. has the highest life expectancy, the lowest death rate from heart disease and the lowest death rates from cancer. That is significant, since heart disease and cancer are the two leading causes of death among Canadians. Of course, there is always room for improvement, but our leadership in outcomes is something to celebrate and something that other provinces are trying to copy. With this budget, we are also continuing the work towards delivering better outcomes for children and youth in our K-to-12 education system. In the coming year per-pupil funding will increase to $8,357 per pupil, the highest in B.C. history and 33 percent higher than a decade ago. As in the health care system, we are not just spending more. We're supporting new approaches to encourage and improve student achievement. Starting in September, full-day kindergarten will be available for every five-year-old starting school. We now have more than 300 StrongStart centres in schools around the province, giving parents and preschoolers free, convenient access to high-quality early learning programs. More and more communities are also seeing benefits from neighbourhood learning centres, school-based community hubs that offer programs and services for learners of all ages. Since the year 2000 the province has increased funding to B.C. public schools by more than $1.4 billion and, with this budget, operating funding for school districts continues at record-high levels. The Ministry of Social Development will receive an additional $65 million over three years to provide for income assistance to individuals and families in need, and funding for most other ministries will continue at levels seen in last year's plan. That is consistent with our goal of keeping spending growth in check. I would be remiss if I did not acknowledge the role of public sector workers in this area. Their acceptance of the government's net zero bargaining mandate continues to play an essential part in our prudent fiscal management. Prudent management helps ensure that we have flexibility, and this budget is all about creating the maximum amount of flexibility for the new Premier and executive council. We have an excellent track record and a great foundation to build on. However, we do face considerable uncertainty related to the harmonized sales tax. The government is committed to accepting the will of the majority when the referendum is held. This means we may be called upon to cancel the HST and reinstate the old regime of PST plus GST. That would have major implications, not the least of which is paying back the $1.6 billion B.C. is receiving from Ottawa as part of our HST agreement. There is also a host of logistical issues for businesses both large and small, and those are just a couple of the broad top-of-mind issues. The fact is that no province has ever backed out of the HST after implementation. Being the first would put us into uncharted waters. No one is naive enough to think that repealing the HST will make taxes go away. Of course, no one likes paying taxes, but that's how we fund public services. To ensure that British Columbians have the facts they need to make an informed decision, we recently appointed an expert panel to review the referendum options and report to the public independently about their likely impacts on consumers, on the budget and on our economy. It's also worth noting that entirely apart from the HST issue, tax rates in this province have declined significantly over the past decade. Since 2001, individuals and families have benefited each year from cuts to personal income tax rates, and businesses have benefited from corporate tax reductions totalling approximately 40 percent. Those reductions translate into real improvements in our quality of life because, as government has often said, the best way to support people is to leave more money in their paycheques and let them decide the best ways to use it. We have great confidence in British Columbians. They are the people who have built our province, who have chosen to call this place their home, who have chosen to build their lives and plan their futures here. These are the people we serve as a government, and it is through their hard work and their contributions that we have turned this province around. Ten years ago, after a disheartening decade of decline, British Columbia appeared to be in serious trouble. Businesses were closing, investors were leaving, and young people were choosing to build their futures somewhere else. Unemployment was rising, disposable income was falling behind, and in 1999 B.C. became a have-not province again for the first time in almost 40 years. By 2001, when this government took office, B.C. was facing a structural deficit of $4 billion, a legacy of ten years of mostly deficit budgets. We were determined to turn things around and leave our children a different kind of legacy. We set out a clear plan, and we got to work immediately to make things better for our province and our people. We cut personal income tax rates for all British Columbians by 25 percent, the largest single tax cut ever, and that was on our first day in office. We cut the corporate income tax rate by a full 3 percentage points, and we eliminated the corporate capital tax for general corporations. That was only the beginning, and each year since then we've built on our plan and maintained the fundamental principles that guide it — prudent management, competitive taxes, and protection for health care and other vital services.  When you look back at all that we've achieved together as a province over the last ten years, it really is remarkable. It's clear the government's plan has worked. We've gone from an uncompetitive regulatory and tax environment to one of the most competitive anywhere. We put an end to the chronic overspending that plagued the 1990s and threatened B.C.'s economic future. We paid down the province's operating debt by more than $9 billion even while investing record amounts in health care and education. The outcomes are clear. In this past decade real disposable income has grown by 2.1 percent after declining by 0.8 percent in the 1990s. Private sector investment in B.C. has grown by an annual average of 4.4 percent, compared to just 1 percent in the 1990s. Growth in B.C.'s GDP has in most years outperformed the Canadian average after trailing the nation in the latter half of the 1990s. We've built new partnerships for trade and investment that promise to deliver even greater benefits in the years ahead. We are also beginning to realize the full potential of our Olympic legacy. One year ago this week billions of people around the world were sharing in the energy and joy and excitement of our Winter Games. The games succeeded far beyond most expectations, and we hope to see similar results in the years ahead as all the new relationships forged through the games are translated into social and economic opportunities. After all, that's what our province is all about. Our people, our geography, our stunning natural attributes, our world-class cities and our untamed spaces all combine to offer a sense of boundless opportunity. That's what has drawn people here for centuries. Now that the worst of the recession is behind us, that same spirit of potential will help us move forward together with confidence. We have come so far. We have achieved so much in the past ten years. Now we have an opportunity to make the decade ahead the most exciting, rewarding and prosperous ever in our history.