Elevated home sale activity continues to outstrip the supply of homes for sale in…
The government of British Columbia released 2019 budget on Tuesday, and Vancouverites will get a much welcomed round of good news. Those who were wary of new taxes will be relieved to know that this year’s budget does not introduce any new ones. In fact, the budget introduces a number of tax cuts, and a number of new social programs that will put more money in the pockets of families with children and graduate students.
One of the biggest highlights of last year’s budget was a number of record-breaking investment in child care, for which over $1.3 billion were set aside. This year’s budget carries some of that momentum in the form of new tax benefits for middle class families.
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This year’s budget introduces the new B.C. Child Opportunity Benefit, which replaces the former Early Childhood Tax Benefit. Under this new program, there will be a significant increase in financial support that parents can receive for their children. The B.C. Child Opportunity Benefit extends the age limit for qualified children from the age of 6 all the way to 18. Beginning in October 2020, families with one child could receive up to $1,600, families with two could receive up to $2,600 and those with three up to $3,400.
Given the high living costs of living in our city, these benefits will give new parents a much needed boost. In addition, $6 million dollars have been set aside for respite services for children with disabilities. Though this is not a gigantic amount of funds, it’s a step in the right direction.
Students and graduates saddled with federal and provincial student loans will be glad to know that the government has finally kept its promise to get rid of interest on their loans. As of Feb. 19, 2019, their student loans will no longer accumulate interest. According to the budget highlights release “someone with $11,200 in provincial loans or $28,000 in combined federal and provincial loan debt will save approximately $2,300 in interest charges on their B.C. student loan over a 10-year repayment period.
Regarding housing, the 2019 budget will devote $76 million to buy more land, create 200 additional modular homes for homeless or at risk of becoming homeless people. Those new units will supplement the 2,000 modular units which are already being developed.
As mentioned in past articles, the B.C. government has been trying to eliminate unnecessary red tape that prevents the construction of new and highly needed affordable housing. This year’s budget gives us a status report on a number of housing projects on the way, including 4,900 new affordable, mixed income rental homes, 280 transition homes for abused women and children, 2,295 housing units for students on campuses and 1,750 new housing units for indigenous peoples, both on and off reserves.
The prevalence and growing intensity of wildfires in the last few years is also being addressed in this year’s budget. Last year’s budget allocated $72 million towards supporting wildfire prevention and recovery efforts. This year’s budget also carries that momentum by setting aside an additional $111 million over the next year, and $13 million towards forest restoration in areas damaged recently by wildfire and disease.
In terms of infrastructure, the B.C. Budget dedicates $6.6 billion towards replacing the Pattullo Bridge at Surrey, constructing the Broadway subway, adding additional lanes to Highway 1 through Kicking Horse, and replacing the Bruhn Bridge in Sicamous.
Fiscal conservative citizens may raise concerns as to how the government expects to pay for all of these projects. The report is quite optimistic about the future by stating that “Over the next three years of the fiscal plan, government will continue to run surpluses of $274 million, $287 million and $585 million in 2019-2020, 2020-21, and 2021-22 respectively.” The report goes on to say that “B.C. remains the only province with a AAA credit rating from all three major international rating agencies and our debt-to-GDP ratio is at its lowest point since the 2008 financial crisis.”
The budget makes it seem as if the B.C. government’s foreign buyer, speculator and empty home taxes were directly responsible for Vancouver’s housing prices decrease that took place last year. “In less than a year, we’re seeing results,” states the report. Of course, a growing number of economists disagree, and instead believe housing prices are dropping all across the country because of the effect of the mortgage stress test, and rising interest rates.
But regardless of opposing views, finance Minister Carole James remains upbeat. “I’m feeling cautiously optimistic about the direction we’re taking so far,” she states. “I don’t believe we’re going to see a crash in the housing market.”