February 28, 2002
Response to the Budget Speech
Budget Speech Debates
R. Lee: I'm pleased to rise today to respond to the budget. I would like to thank the Minister of Finance for the hard work and the difficult decisions he had to make to prepare for the first full budget of this government.
This is the first time that I've had the opportunity to participate in the process of preparing the budget, and I believe the process adopted by this government is probably the most democratic one in the history of this province. Seventy-seven out of 79 MLAs, as members of the government caucus committees, had the opportunity to take close examinations of the options available to the various ministries when they were presented with the service plans for the next three years. The decisions on the service plans, under a set of constraints, actually determined the scope and the blueprint of the budget. This is a transparent and democratic process, although many tough decisions have to be made along the way by the members of the caucus, who represent 97 percent of the population.
We all know that the challenges and constraints faced by British Columbia, our province, are tremendous. Over the last decade the provincial debt has doubled to $35 billion at the same time as the province has slid to last in Canada in terms of private investment and economic growth. Over the last decade our real per-capita GDP only grew by 5 percent, while the adjusted expenditures have grown by over 25 percent. I looked up the budget of 1992, which was $18 billion. The budget for 2002, this year, is $25.6 billion, plus $2.7 billion for capital expenditure. This is clearly not sustainable.
On the other hand, Alberta's economy has grown much faster that our province's - in fact, five times faster than ours - and Ontario's grew by 19 percent over the same period.
Sometimes it is difficult to make comparisons, and sometimes we don't want to, but if we want to continue to pay our nurses, doctors, teachers and public servants among the best in Canada, we must make major structural changes to revitalize our economy so that the government can have the revenue to pay for these services.
Over the last decade our taxpayers have not done well. Working British Columbians were hurt by a slowdown of the provincial economy. Average annual take-home pay actually shrank by $1,100 while the average take-home pay in Alberta and Ontario increased. We must make changes to increase the disposable income of all British Columbians.
I'm delighted to see that the budget delivers on the commitments to build a better future for this province by taking steps to restore sound fiscal management, revitalize the economy and put patients and students first. The three-year service plan for ministries and Crown corporations included in the budget provides detailed information about the changes ahead, and these plans will be reviewed and updated annually.
I'm pleased to see flexibility built into the implementation of the plan to take into account changing economic and financial circumstances. This ever-changing world is full of surprises. Before the events of September 11 last year, who would have predicted that economies all over the world would take a hit in the last quarter of 2001? We didn't know that.
The impact of some of the changes contained in the budget may not be entirely transparent at this moment, and there may be some unforeseen hidden costs in the elimination of certain programs. I'm sure the review process will indicate the cost-effectiveness of the implementation of programs, and appropriate actions will be taken to make changes to the service plan if necessary.
I am pleased to see that the government has taken action to protect the most vulnerable in our society and to keep some of the most cost-effective programs. The Ministry of Children and Family Development has committed to spending more money than ever to help prepare children to learn, and there will be over $11 million in new funding over last year's budget for early childhood development.
I'm particularly pleased to learn that the ministry for early childhood development has taken action to establish a legacy fund, in cooperation with the Vancouver Foundation, to fund programs related to early childhood development. Other school-based service funds will be reviewed to ensure that the services help the most vulnerable in our society, including our children.
The commitment of the Ministry of Children and Family Development to protect funding for community schools and hot-lunch programs is commendable. We have also waived the PST on purchases made with funds raised by school PACs, the parent advisory councils.
I've been involved with the parent advisory councils in elementary and secondary schools and the district parent advisory councils in Burnaby for many years. I am always impressed by the care and energy shown by the parents to help their children succeed. The funds raised by the parents can now be used to buy more materials for the learners and to support more extracurricular activities.
Health care and the changes in MSP. The premiums for over 230,000 low-income British Columbians will be reduced or eliminated. Many seniors who have previously not qualified for assistance will be able to get the benefit now.
Funding for women's shelters and transition houses is protected in this budget. Women's groups have expressed concerns to me about the possibilities of losing funding for these programs. I'm happy that these supports are still in place.
Funding for monitoring and protection of drinking water will be increased, in fact, by an additional $1.5 million. The Ministry of Water, Land and Air Protection has taken measures to ensure that the provincial health officers, who play a critical role in the testing of drinking water, will have the obligation to report these results publicly. I'm relieved that the events in Walkerton will be prevented from occurring in British Columbia.
We have maintained the seniors bus pass, so our seniors can travel freely in their communities. Again, the Premier and the Minister of Human Resources were quick to realize that the elimination of this program would have major impacts on seniors.
The B.C. sales tax credit for low-income British Columbians is increased to $75 from $50 - a 50 percent increase. This will help to mitigate the impact of raising the PST from 7 percent to 7.5 percent. One has to spend $5,000 annually in provincially taxable goods to incur an extra $25 in PST.
We have increased disability-related income tax credits, including credits for in-home care of relatives, for disabled dependents and for mental or physical impairment. I'm sure the advocates of the disabled will welcome this initiative to help the mentally and physically disabled.
We have provided additional PST exemptions for qualifying farmers. Agricultural products are essential to the betterment of our health. I'm not in the agricultural business, but my grandfather was a farmer for many years. He emigrated from China to Victoria in 1913. In those days immigrants from China had to pay a head tax of $500. I was told that $500 could buy two building lots in Vancouver at that time. Despite the high cost, many people still came to this land of beauty and opportunity, because it is the best in the world. Today, despite the challenges facing this province, it's still the best in the world to live in. Better still, qualified farmers have additional PST exemptions.
This government has also fulfilled the promise that people earning less than $60,000 will pay the lowest income tax in this country. Low- and middle-income British Columbians deserve to pay less tax after so many years of being burdened with heavy taxes. I believe that these measures are fair and will help the most vulnerable in our society. They will help the B.C. economy as well.
To revitalize the economy of this province, we must recognize the important role of small business. In Budget 2002 the income tax threshold is increased by 50 percent from $200,000 to $300,000. The PST exemption is expanded on machinery and equipment to include repair parts as well.
These changes, together with the announcement last July that the corporate income tax was being cut from 16.5 percent to 13.5 percent, plus the capital tax on financial institutions being eliminated completely on September 1 and the taxes on jet fuel and bunker fuel being reduced, will definitely help to attract more investment and create more private sector jobs in this province.
In my constituency of Burnaby North there are many small businesses in the area of Brentwood Mall and along Hastings Street, and many are coming up in Still Creek and the Lougheed area. These small businesses include retail, specialty stores, professional services, restaurants and high-tech companies. The rise of the income tax threshold in the new budget will definitely help the businesses in Burnaby to expand and increase employment.
Finally, I would like to comment on health care spending, which is $10.4 billion, in fact, or 41 percent of the total provincial budget in the coming year. The wage settlements of nurses, doctors, paramedics and other health care workers have added $769 million, which is new expenditure for this budget. These pressures are going to be balanced by increases of MSP premiums, sales tax and tobacco tax.
Not many people will like fee and tax increases, but these increases are necessary to allow the Minister of Finance to balance out the financial fallout of the arbitrated settlements, which occurred just days before budget day. Hopefully, the 0.5 percent increase in sales tax will be eliminated as soon as possible, as promised by the minister.
In health care spending, an increase of $1.1 billion over the 2001 budget now consumes the combined revenue of all personal income taxes in B.C., including MSP premiums, total federal transfer payments, tobacco taxes and the latest increase in sales tax. All those are included. It's just enough to pay for our health budget. Clearly, the system must run more efficiently to reduce costs.
I'm glad to see that a new structure for health care authorities is implemented to provide greater efficiency. Since fewer decision-makers are in charge of the system now, it will be very important that the decisions made should put patients first and make efficiency the top priority in the system.
In education, I support the establishment of the $45 million leading-edge endowment fund, which in partnership with the private sector will create 20 permanent research chairs at the universities. These chairs will help to attract the faculty that this province needs to compete in the knowledge-based industry.
The government also reconfirms its intention to double the number of graduates in computer science, electrical engineering and computer engineering. I believe these commitments will put British Columbia on solid ground for the development of a vibrant high-tech industry.
The Premier's Technology Council is commanded to take up the task of closing the digital divide in this province. Today the Select Standing Committee on Education, of which I'm a member, will table a report on the future of learners which envisages the renewal of education in this province. If the recommendations are adopted, this will help create a seamless education system that will serve the interest of learners in this province from all walks of life.
I would like to bring conclusion to my comments about this budget. Although this budget contains a $4.5 billion deficit, I believe it is the best this government can do in order to protect health care and education. Based on this budget, the government can start its three-year plan to rebuild the economy for a better future for this province and to bring hope and prosperity to all British Columbians.
