Yesterday, I presented British Columbia’s fifth-straight balanced budget. Each successive surplus illustrates our determined commitment to grow a strong, job-creating economy; invest in priority programs; and keep the cost of government affordable for you, the taxpayer.
It seems like ancient history now, but just four years ago many were skeptical that B.C. could reliably return to a balanced budget. Much of the world was still pinned under an economic downturn of historic proportions. B.C. ranked fifth among the provinces in economic growth.
Yet balance that budget we did, and we have delivered successive balanced budgets every year since. And the B.C. economy has emerged from the middle of the pack to again be a leader in Canada.
While others struggle with deficits, we have the freedom to choose how to invest our surpluses. We can choose to fund the services our citizens depend on without running deficits that our children and grandchildren will have to pay back. We can choose to invest in building schools, hospitals and highways at record level. And remarkably, we have the ability to do both while still choosing to leave B.C. families like yours with more money in their pockets to make their own choices.
With Budget 2017 we intend to move to eliminate Medical Services Plan premiums. As a first step, we are cutting MSP premiums in half for families and individuals with family net incomes of up to $120,000 per year, effective January 1, 2018. As a result, in addition to the estimated two million people who currently pay no premiums, a further two million British Columbians will see their premiums cut in half—a move that will put almost $1 billion in the pockets of middle-class British Columbians.
We take this step not by raising taxes elsewhere, but by drawing on the benefits of having one of Canada’s strongest economies. A typical family of four paying full premiums will save $900 per year in 2018. A single parent with net income up to $40,000 and two children will see their monthly premiums drop from $46 to $23. A family with net income of $35,000 and two children will see their monthly premiums eliminated entirely.
Budget 2017 also supports workers and jobs by helping our businesses to be more competitive. Starting October 1, 2017, B.C. will begin phasing out sales tax on electricity, starting with a reduction to 3.5%, and moving to full exemption on April 1, 2019. This will save small and medium-sized businesses about $50 million per year, with all businesses saving more than $160 million annually. We’re also reducing the small business tax rate to 2% from 2.5%, effective April 1, 2017. This means B.C. will have the second lowest small business tax rate in Canada.
Our strong economy allows us to cut these taxes while continuing to invest in the programs and services you depend on. With this budget, we lay out a plan for significant new investments in classrooms. The Education budget will increase by $740 million over three years compared to last year’s fiscal plan, including $228 million to fund enrolment growth and new funding for rural education, student transportation, K-12 salary costs, continued funding for the Learning Improvement Fund, and an incremental $320 million in interim funding over three years while government works to conclude a final agreement with the BCTF on class size and composition. Budget 2017 is also funding $2 billion in school capital projects over three years—to build, replace, renovate, seismically upgrade, and repair schools across the province.
The Ministry of Health will see a three-year increase of $4.2 billion compared to 2016-17, including funding to support a $100-million, three-year enhancement in services for mental health and substance use, particularly for youth. We’re also providing funding to support families, individuals and children most in need, including for Grand Chief Ed John’s report on Indigenous Child Welfare and to increase to income assistance rates for persons with disabilities.
With discipline and prudent fiscal management, British Columbians will begin to reap the benefits of the solid economic foundation we have laid. Sticking with these principles will continue to deliver the dividends of strong economic growth and affordable government services. A balanced budget may not be enough to grab headlines in British Columbia anymore, but British Columbians have a right to be proud of what they have accomplished.