There are some things you can bet will appear in Tuesday’s provincial budget: money for child care, Indigenous reconciliation and infrastructure projects to “build back better.”
The NDP government says it has a clear vision for a post-pandemic economic rebound, but that vision may be clouded by the malaise rooted in unaffordable housing, a growing overdose epidemic and challenges to the health care system that the government has been unable to solve.
Nevertheless, Finance Minister Selina Robinson has promised a budget that will boost the economy while funding NDP priorities.
In December, when she released a quarterly financial update, Robinson promised spending on priorities such as dealing climate change, reducing poverty, reducing inequality and reconciliation with Indigenous Peoples — while boosting B.C. economic resilience.
B.C.’s dropping deficit and a projected 4.3 per cent growth in gross domestic product in fiscal 2022-23 have created some breathing room for the NDP government.
A $10-billion deficit had been projected at the start of the fiscal year in April, 2021. By December, the projection had dropped to a $1.7 billion deficit for the fiscal year that ends on March 31.
Ken Peacock, the chief economist at the B.C. Business Council, believes the rosier picture is due to government spending less on the pandemic than it had anticipated, while revenues were up because of higher prices for exports, a hot housing market and pent-up consumer spending as COVID restrictions eased.
“That will continue in 2022 and we will get a boost from increased travel as well, but that will change in 2023 when we are projecting growth of around two per cent,” Peacock said.
Although budget details are a secret until the document is introduced in the legislature, here are some of the main items most likely to be in the document that will guide the province in the 2022-23 fiscal year.
Economic recovery
The government unveiled its economic plan on Thursday, which promises spending on training and innovation “to achieve two big goals: inclusive growth and clean growth.”
The plan’s centrepiece is spending $137 million to fund a new $162-million trades and technology complex at BCIT’s main campus in Burnaby. Four new buildings will house 20 trades programs like carpentry, plumbing and pipefitting.
Jobs minister Ravi Kahlon said it’s a response to a labour-market outlook that estimated B.C. will need to fill close to one million skilled trades jobs over the next decade.
Other workers and smaller communities could get more money to speed up extension of high-speed internet to the entire province.
“With the pandemic, we have seen a migration of people out of larger communities and into smaller ones with the expectation that they will still have their connectivity, so they can work from home,” said Laurey-Anne Roodenburg, the president of the Union of B.C. Municipalities.
“There are many benefits, like the safety aspect of having good connectivity, or health — especially in remote rural areas for telehealth.”
Kahlon said there will be spending on innovative projects to boost a green economy.
The province created the InBC Investment Corp. for that purpose last year. It’s expected the independent investment fund will receive its first $500 million budget next week.
While government has said its future spending will be made through the lens of inclusion, the 42-page economic plan does not include any immediate plans to enhance social programs or create new ones.
That concerns advocates like Helaine Boyd, co-executive director of Disability Alliance B.C.
The province ended its $300-a-month pandemic support payment to people on income assistance and disability payments last year, and replaced it with a permanent $175-a-month increase to disability and assistance payments.
It also introduced accessibility legislation and created an accessibility directorate in the last budget, but Boyd said neither has been funded. She said government indicated it accepted a 2019 recommendation by the B.C. Human Rights Commission to create a legal rights service to help people detained under the Mental Health Act, but there has been no action.
“These things keep us in poverty and keep us excluded,” said Boyd. “We want to see money in this budget attached to promises made in the past.”
The senior economist and public finance policy analyst at the Canadian Centre for Policy Alternatives said government should not be afraid to spend more on social programs.
“For the past 30 years, most governments in the western world have come to believe that we have to constrain spending, but we have the capacity to increase public investments,” said Alex Hemingway.
“Operating spending as a share of GDP is substantially lower today than it was 20 years ago. If we were spending the same share of our GDP this year as we did 20 years ago, we’d have an extra $5 billion on the table.”
While Hemingway and Boyd urge government to take bolder steps to address social inequities laid bare by the pandemic, businesses hope the budget will recognize the struggles they face.
Peacock cited increasing medical and WorkSafe premiums, new paid sick leave provisions and increasing wages as having hurt businesses.
“A lot of businesses are really feeling the squeeze and the pressure, and we are also concerned about the long term decline of investment,” he said. “We’d like to see a signal in the budget that government is willing to address that.”
The CEO of the Mining Association of B.C. said the regulatory regime, high personal and corporate taxes and the carbon tax are driving away investment.
“B.C. has the highest carbon tax in the world and it’s the only jurisdiction that does not provide meaningful carbon pricing supports to industries that compete in global markets,” said Michael Goehring. “Global markets set the price of our product, but if our input costs are higher than others, then it’s much harder to compete.”
Goehring said pleas to government have fallen on deaf ears.
“The government’s own Climate Solutions Council wrote to Environment Minister George Heyman twice last year, asking him to address the competitive challenges faced by trade-exposed industries, but it got no response,” he said.
“It’s through exports that you can grow your economy more quickly than population growth and that is how everyone becomes wealthier and more prosperous,” said Peacock.
The Council of Forest Industries, which represents the majority of lumber, pulp and paper and manufactured wood producers in B.C., reminded government during pre-budget consultations that its sector contributes more than $2 billion annually to provincial revenues and provides more than 100,000 jobs.
“It is a sector that each year helps to pay for things like hospitals, schools, mental health support and other critical services that make life better for people,” said Alexa Young, COFI’s vice-president of government and public affairs.
“What we’d like to see from the budget is a recognition of the outsized role that the forest industry plays in supporting people’s well-being across British Columbia and that the future can be bright.”
The industry is worried about its future after the province launched what it called “transformative change in how forests will be managed.”
B.C. suspended harvesting rights for two years over 26,000 square kilometres of old growth forest, an area equivalent to 65,000 Stanley Parks, while it negotiates with First Nations to enter or expand their participation in the sector.
Young said industry supports the province’s goals, but it feels left out of the process.
“It is important to regularly modernize forestry policy to reflect the fact that climate is having an effect on our forests, to continuously look at how you better engage and increase the participation of First Nations in the sector. And all of that is incredibly important, but how you get there is important, too,” Young said. “And having an inclusive process that has everyone at the table is crucial.”
Child care
The promise of $10-a-day child care has been a large plank in NDP election platforms since 2017, but advocates say last year’s budget did not live up to expectations.
In 2021, the province said it would create just over 3,700 $10-a-day child care spaces over three years.
“We were very disappointed,” said Sharon Gregson of the Coalition of Child Care Advocates of B.C.
However, a federal-provincial child care agreement that was signed in July injected new life into an old promise. Federal funding means 4,000 existing child care spaces will convert to $10-a-day spaces by the end of March.
The new provincial budget must include funding to meet targets set under the deal to convert 12,500 spaces to $10-a-day spaces and reduce the average cost of child care by 50 per cent by the end of December.
“Those deliverables are not something they can carry over into the future,” said Gregson.
The coalition wants the budget to add dollars to create a provincial wage grid that would set hourly rates from $20 to $29 for early childhood teachers, based on their education.
It hopes to see funding to create 5,000 new child care spaces and for items not included in the bilateral agreement, such as before- and after-school care for school-aged children.
“It is a significant list of expectations because child care is significant for economic recovery,” said Gregson.
“If we want more people to get into the workforce, if we want child care to be a well-respected and well-compensated profession so that children get the best start, then it’s going to take bilateral funding and additional provincial funding to make it happen.”
Housing
The province insists it’s cracking down on real estate investors through its foreign-buyers tax and the speculation and vacancy tax, while tackling supply issues under a decade-long plan to spend billions of dollars on affordable rental units and social housing.
In 2018, the province announced it would create 114,000 new units of affordable housing for middle-income families, Indigenous people, students and women and children fleeing domestic violence over 10 years. The plan includes a further 14,000 purpose-built rental apartments. The plan promised thousands more emergency and permanent spaces for homelessness people.
Three years later, 26,000 units of affordable housing are completed or underway, which is slower than expected.
Recently, the minister for housing, David Eby, said he is working on legislation that he will introduce after municipal elections this fall. It would streamline local government development approvals and close loopholes he believes have allowed local governments to reject provincial housing projects.
“Based on comments by minister Eby, that the province is doing all it can already and municipalities need to step up, I am not expecting a big infusion of money in this budget, beyond what has been built into the 10-year plan,” said Hemingway.
Climate resiliency
Floods, fires and heat domes in 2021 may have a greater influence than the pandemic on this next provincial budget. The past two budgets included billions of dollars in pandemic support. But analysts and construction businesses believe the next budget will feature increases to infrastructure spending on projects that ensure supply-chain routes are climate-change resistant.
“God just keeps creating more and more work for us,” said Kelly Scott, president of the B.C. Road Builders and Heavy Construction Association.
The province has already spent millions on emergency road repairs after the floods and landslides late last year and Scott expects millions more will be spent in the next fiscal year.
“B.C. has 47,000 kilometres of highways and we may have gotten away with lower investments in maintenance before, but we have to build back with climate-resilient construction in the future,” he said. “So we expect to see a lift in what’s called the rehab budget.”
Climate-resilient infrastructure spending aligns with legislation expected this fall to modernize B.C.’s Emergency Program Act. The amendments, which have been promised for about four years, will include prevention, mitigation and response measures.
“We can’t dither any longer,” said Tim Takaro, a professor of health sciences at Simon Fraser University. “But I don’t hear a sense of urgency from the premier.”
The province spent $1.3 billion on oil and gas subsidies last year. Takaro will be watching to see what’s budgeted this year.
“The Clean B.C. plan has some great elements to it but it can’t happen alongside the growth of the liquefied natural gas industry,” he said.
Health care
Government has promised to improve health care delivery with more primary care centres and by creating more nursing student spaces.
The president of Doctors of B.C. wants the 2022-23 provincial budget to include funding to recruit and retain badly needed family physicians and surgeons.
“We need funding to find a solution for problems that patients are having in seeking access to health care,” said Dr. Ramneek Dosanjh.
“The fee-for-service model is outdated because it does not address the complex health care needs of patients nor does it recognize the increasing costs to run a doctor’s office. We need to end the attrition crisis of doctors packing up and saying they’ve had enough because of those issues and burnout from the pandemic.”
Indigenous reconciliation
The province has said reconciliation has been considered in government decision-making in the two years since it passed the Declaration on the Rights of Indigenous Peoples.
It has promised to implement the declaration.
The throne speech said government will “return Indigenous peoples’ inherent jurisdiction over child welfare, address the disproportionate representation of Indigenous Peoples in the criminal justice system and ensure First Nations share meaningfully in the prosperity of the land they have lived on since time immemorial.”
The new economic recovery plan envisions an Indigenous economic development agency.
But Terry Teegee, the elected regional chief of the B.C. Assembly of First Nations and a member of the First Nations Leadership Council that advises government, said he’s seen very few dollars budgeted to achieve those goals.
“We need funding to get the plan going, to create Indigenous governing bodies that will allow First Nations to make informed decisions to manage climate change, to play a meaningful role in regulatory processes, to enter into economic partnerships, to create Indigenous-led child welfare services, to train workers and to achieve economic, health and social goals,” he said.
Teegee said he will be looking to the budget to gauge government’s commitment to those goals.
“We didn’t expect much from last year’s budget because of COVID but we’re hoping for more resources for pandemic recovery this year. There has been some funding in the past, but so far there has been a lack of political will to fully fund what’s needed, and that could be because it’s difficult for a leopard to change its spots.”
The B.C. Liberal finance critic, Peter Milobar, who was the Indigenous Affairs critic during last year’s budget, called reconciliation “another example of empty government promises.”
“It’s about digging in, past their flowery words used in their press releases, to see, is there actual, meaningful added capacity going into things like Indigenous reconciliation or is it just a shuffling of the cards and making it look like it’s new?”
