Top Highlights Our plan for B.C. is working. Through a combination of fiscal discipline, tax reductions for families and business, and reducing barriers to investment, families are benefiting and our economy is growing. Finance Minister Colin Hansen talks about taxpayers.
After inheriting a $3.8 billion structural deficit from the NDP, through sound fiscal planning we have reduced operating debt by 47 per cent (from $15.4 billion in 2002/03 to $8.3 billion in 2007/08) and reduced our debt-to-GDP ratio from 21.3% to 13.8% over that period. The results are lower debt costs and seven credit rating upgrades.
Our prudence has allowed us to further invest in public capital. Since 2001, we’ve invested $31 billion in capital projects across B.C. in education, health, transportation and other sectors. View a graph showing increasing support for students in B.C.
We’ve made over 100 tax reductions since 2001, leaving more money in people’s pockets and restoring B.C.’s economic competitiveness.
We have the lowest taxes in the country for people earning up to $116,000 a year.
We stimulated economic growth with more competitive business tax rates, cutting corporate income taxes by 39 per cent and small business taxes by 44 per cent. Corporate and small business taxes will soon be the lowest anywhere in the G7. View a graph showing tax reductions to support businesses in B.C.
Our continuing personal and business tax cuts are keeping people and businesses in British Columbia and creating more jobs, over 370,000 since Dec 2001, 80 per cent are full-time.
In 2003, for the first time since the early 1990’s, more people moved back to B.C. from other provinces than left – and the trend’s continued every single year including 2008.
Alternative Service Delivery (ASD) We’ve partnered with the private sector to deliver services where there are opportunities to improve service and reduce costs for taxpayers.
We’ve signed 10 ASD contracts valued at over $1.8 billion since 2004 for a variety of business process outsourcing and information technology projects.
The partnerships are expected to generate at least $550 million in savings:
Revenue Management (EDS Advanced Solutions): $572 million over 10 years = $382 million in net savings.
Workplace IT Support Services (IBM Canada): $300 million over 10 years = $82 million in net savings.
Payroll Operations (TELUS): $133million over 10 years = $33 million in net savings.
Network BC agreement with TELUS cut cost of telecommunications services by $54 million.
The savings realized from ASD contracts allow us to put more money into schools, hospitals and communities.
In addition to financial savings, significant improvements in service are realized.
Customer complaints dropped from an average of 84 per month to virtually zero.
Call wait times are down to just 2.5 minutes from 15.9 minutes.
Today there are zero busy signals, a decline from 27,000 previously.
The Telus partnership cut 700,000 paper forms a year and reduced maximum wait times for calls by 50 per cent.
The Maximus partnership on MSP saw the average phone busy rate drop from 53 per cent of all calls to virtually zero.
Before the Maximus contract the enrolment rate was 64 per cent within 40 days. 90 days after the contract it was 99 per cent within 20 days.
We are the FIRST jurisdiction in Canada to proactively publish onto the web signed contracts and report regularly on the performance measures of ASD projects, making us the most transparent jurisdiction in Canada and a worldwide transparency leader.
The carbon tax on pollution introduced on July 1, 2008 equals 2.34 cents per litre of gas. The price goes up 1.17 cents a year until 2013.
The B.C. carbon tax on pollution will have the equivalent effect of taking nearly 800,000 cars off our roads.
Climate experts agree that in order to meet our 33 per cent emissions reduction target by 2020, we have to put a price on carbon. We have done that in a way that returns the benefits to taxpayers.
The carbon tax is a tax on pollution designed to cut other taxes. Under law, every cent of the $2.3 billion collected over the next three years will be returned to taxpayers through personal, small business and business tax cuts:
Personal income taxes cut by 5 per cent.
Small business corporate income taxes cut from 4.5 per cent to 2.5 per cent.
Corporate income taxes cut from 12 per cent to 10 per cent (by 2011).
Low-income families now receive tax credits worth $100/adult and $30/ child annually, and every British Columbian received a $100 Climate Action Dividend in 2008.
Over the next three years, new measures under Budget 2009 include:
Increase the low income climate action tax credit by 10 per cent, effective July 1, 2011.
Provide a Northern & Rural Homeowner benefit of up to $200 beginning in 2011.
Increase the Industrial Property Tax Credit to 60 per cent from 50 per cent beginning in 2011 ($65 million a year by 2011/12).
Reduce school property taxes for farm land by 50 per cent beginning in 2011.
As a result of these changes, we now have the lowest income taxes for everyone earning up to $116,000 annually, and the vast majority of earners have received at least a 37 per cent income tax cut since 2001.
The carbon tax applies to everyone who burns fossil fuels in B.C., including industry and individuals. 70 per cent of the cost is paid by business and industry
Remaining emissions caused by processing, agriculture and landfills will be addressed through a ‘cap and trade’ system to be instituted by 2012 through the Western Climate Initiative– a group of 11 member states and provinces representing nearly 85 million people.
B.C.’s carbon tax proposal has been supported by 70 leading economists as well as major environmental organizations across Canada.
Through our $62-million LiveSmartBC program, we are providing incentives and options for people to save money – up to $3,250 per homeowner, including:
Tax rebate up to $2,000 for fuel-efficient and hybrid electric automobiles.
Sales tax exemption for biodiesel fuel.
Sales tax exemption for kits to convert vehicles to operate on natural gas or propane.
Incentives or rebates for energy efficient doors, windows, insulation, appliances, heating and lighting.
Individuals can also make choices to reduce and save further:
Regular tune-ups and proper tire inflation can save $200 a year in gas.
Reducing speed from 100 km/h to 90 km/h will save $164 a year.
Reducing idling by 10 minutes a day would save $52 in gas every year.
Municipalities and school boards will be eligible for the Climate Action Revenue Incentive program – a conditional grant program that will grant back what they pay in carbon tax as long a they commit to becoming carbon neutral by signing on to the B.C. Climate Action Charter.
We have also introduced initiatives to help the trucking industry:
Invested $4 billion to date in new highways and bridges, and $3.3 billion over the next three years, on projects such as the Gateway program and Kicking Horse Canyon to ease congestion that adds $1.5 billion a year in costs.
Removed the tolls on the Coquihalla highway saving nearly $60 million a year in tolls – more than half paid by the commercial trucking industry.
$30 million in programs to boost trucking efficiency including PST breaks on aerodynamic components for trucks, electrification of trucks stops, and initiatives to speed up weighing and compliance processes that add time and money.
Low-Income Taxes and Programs We are assisting low-income British Columbians by putting money back in their pockets, allowing families to make their own choices about what is best for them and backing it up with smart programs that give support to those most in need. Finance Minister Colin Hansen talks about low-income taxes for British Columbians.
Our new Low Income Climate Action Credit provides British Columbian families earning up to $35,000 or less an annual payment of $100 per adult and $30 per child annually (this will increase to $105 for adults and $31.50 for children on July 1, 2009, and a further 10 per cent in 2011).
Under RAP, we’re helping more than 7,700 households with maximum monthly assistance of up to $765 for a family of four in Metro Vancouver ($9,180 a year) and $621 in the rest of B.C. ($7,452 a year).
Doubled the SAFER rent subsidy program for seniors; provides a maximum annual rental subsidy for a senior couple in Metro Vancouver of $8,148 and $7,176 in the rest of B.C. More than 15,700 seniors receive SAFER today. That’s 3,700 more than in 2001.
We increased the home owner grant by $100 and eliminated the threshold for low-income seniors, veterans and persons with disabilities.
We lowered or eliminated MSP premiums for 215,000 people; Healthy Kids Program provides $700 per child, per year for additional dental and eye care on top of MSP Premium Assistance.
We lowered drug costs for 300,000 people with our Fair Pharmacare program; 82 per cent of all clients saw their costs lowered or frozen.
We provide full child-care subsidy for parents earning up to $38,000, serving 50,000 low-income children; now a single parent of two kids under age 6 earning up to $38,000 a year will see their annual subsidy double to over $14,200 a year (a nearly $7,000 a year increase).
Private-Public Partnerships (P3s) We are using P3s to build roads, hospitals and other infrastructure because they transfer risk, lower costs and make use of private sector innovations and ingenuity. These savings can go back into other programs or tax cuts. Finance Minister Colin Hansen talks about the success of private-public partnerships.
Despite rapidly escalating construction costs and a labour shortage, every P3 project undertaken by us has been on time and on budget.
P3s have delivered over $340 million in savings and benefits to B.C. taxpayers. All savings estimates are propositions of estimated savings, as compared to what the project would have cost had it been delivered in a traditional manner.
Partnerships BC is an internationally recognized centre of excellence for public-private partnerships. They have won 19 provincial, national and international project awards.
There’s currently $9 billion invested in P3 projects, $5 billion of which has been leveraged from the private sector, in more than 25 projects through Partnerships BC, including:
$1.9-billion Canada Line – currently ahead of schedule and on budget. Taxpayer savings of $92 million confirmed by Auditor General.
$600-million Sea-to-Sky Highway improvement project – being delivered on time and on budget. P3 providing $131 million in added benefits to taxpayers at no additional cost.
$355-million Abbotsford Regional Hospital and Cancer Center - opening on time and on budget. A state-of-the-art 300-bed regional hospital and cancer centre to replace the aging MSA Hospital in Abbotsford. Savings to taxpayers $39 million.
$144-million William R. Bennett Bridge in Kelowna – opened 108 days ahead of schedule and delivered on budget.
$95-million Gordon & Leslie Diamond Health Care Centre at Vancouver General Hospital - delivered on time, on budget.
$29million Charles Jago Northern Sport Centre in Prince George – despite significant scope increases, there were no additional cost to taxpayers because of P3 - delivered on time, on budget.
$27-million Britannia Mine Water Treatment Plant - delivered on time and on budget - cleaning up Howe Sound while achieving a $10 million savings for taxpayers.
We’ve made 100 tax cuts (120) since 2001, and B.C. has gone from the worst economic record in Canada to one of the best.
B.C.’s corporate and small business taxes will be the lowest in the G7 by 2012.
We eliminated the NDP’s corporate capital tax on non-financial corporations in 2001.
We’re phasing out the corporate capital tax on financial institutions between now and 2010.
We cut the corporate income tax rate to 11 per cent last year, it’s now the 2nd lowest in Canada behind Alberta, and we’re cutting it further to 10 per cent by 2011.
By 2011, this means we will have cut the general corporate income tax rate by 39 per cent since 2001, taking it from the second-highest in the country at 16.5 per cent to matching Alberta as the lowest in Canada at 10 per cent.
Since 2001, we’ve cut the small business corporate income tax rate from 4.5 to 2.5 per cent – a reduction of 44 per cent.
In 2001, we eliminated PST on production machinery and equipment.
We introduced training tax credits for both employers and employees in providing incentives for people to enter and complete apprenticeship programs.
We’ve reduced regulatory requirements by 42.8 per cent since 2001.
Small Business Tax Reductions
We cut the small business tax rate to 2.5 per cent, the fourth lowest rate in the country, a total reduction of 44 per cent.
We doubled the threshold for small business income to $400,000 in 2005.
We increased the Small Business Venture Capital tax credit budget from $25 million to $30 million, with $7.5 million allocated to clean technology businesses, resulting in a 20 per cent saving in annual corporate operating costs when compared to the U.S.’s west coast.
Business Tax Competitiveness
Our current corporate tax rate is among the lowest in North America. Our top marginal corporate income tax rate is 30.5 per cent, compared to the US federal rate including state taxes of 35 per cent.
By 2011 our corporate income tax rate will be on par with Alberta, giving us the lowest corporate tax rates in Canada.
We’ve planned for corporate tax reductions over the next three years to give us a combined federal-provincial rate of 25 per cent, the lowest corporate income tax rate of G7 countries, and 10 points lower than the US federal rate by 2012.
KPMG recently found that of 35 major world cities, Vancouver ranked fourth-best for general tax competitiveness – 24.8 per cent lower than the US average.
