For Immediate Release
Tuesday, Feb. 28, 2023
VICTORIA, B.C. — On behalf of thousands of businesses across the Lower Mainland, the Greater Vancouver Board of Trade has issued a letter grade of C- for the 2023-24 provincial budget.
Senior GVBOT staff travelled to Victoria for the provincial budget lockup, where they received an advance copy of the budget and assessed it on three criteria: Economic Vision; Fiscal Prudence; and Tax Competitiveness.
“Our members had hoped for measures to offset the rising costs of doing business but found no relief in Budget 2023,” said Bridgitte Anderson, President and CEO of the Greater Vancouver Board of Trade. “Unfortunately, the budget is essentially silent on an economic strategy to attract investment, and increase our innovation capacity and competitive advantage. With a slowing economy and a growing population, we need a strong private sector and competitive investment conditions to increase prosperity across the province,” noted Anderson.
One promising investment responds to acute labour challenges and recommendations found in the Board of Trade’s recently released report - Solving B.C.’s Workforce Challenges.
“Our over 5,000 members are struggling to access the talent and the skills they need to grow their business,” noted Anderson. “I am pleased with the investment in the Future Ready Plan and believe it will pay dividends if it is done in close collaboration with the business community,” concluded Anderson.
Budget 2023 also includes sizable investments in our social infrastructure. We are appreciative of the additional funding for health and mental health, given the significant impacts of the pandemic on British Columbians. In addition, investments that support a rapid response to encampments is well-received, alongside investments in public safety that strengthen enforcement and crime prevention.
There is $16.7 billion set aside in the budget in various contingency funds over three years and it is concerning that these amounts are such a large percentage of planned expenditures in the budget.
2023 REPORT CARD RESULTS
Economic Vision: C-
Some positive initiatives include:
- $480 million for the Future Ready Plan that will include mechanisms and funding to assist small and medium-sized businesses in finding and implementing practical solutions to current labour market challenges and prepare for a changing global economy
- New funding to seek to speed up natural resource permitting affecting housing
- $6 million for the development of a new critical minerals strategy
Aside from the initiatives above, and the Future Ready Plan, there is scant mention of small business, innovation, manufacturing, or business issues in general within the budget document. There are no substantive measures to reduce costs or generally improve business conditions.
Fiscal Prudence: C
The government is projecting deficits totaling more than $11.0 billion over the next three years. However, there are significant set asides in various contingencies.
Total debt is projected to significantly increase to $134.3 billion by the end of the fiscal plan. This represents an increase of 43% from 2022-23 to 2025-26. The vast majority of this debt is taxpayer-supported.
Expenses are expected to rise to $84.7 billion in 2025-26. This is an increase of $18 billion between 2021-22 and 2025-26. 2023-24 increases are significant, totaling nearly 13% year-over-year.
Tax Competitiveness: C-
Budget 2023 maintains British Columbia’s ranking as the province with the highest marginal tax rates on non-residential investment in the country.
British Columbia announced the carbon tax, currently at $50 per tonne, will increase annually by $15 per tonne until rates are equal to $170 per tonne in 2030, aligned with the federal goals.
The budget did announce a new made-in-B.C. output-based pricing system (OBPS) will be coming to B.C. It notes that a portion of revenues paid by industries regulated by the made-in-B.C. OBPS will be directed to continuing the CleanBC Industry Fund to support the development, trial, and deployment of projects that reduce GHG emissions from large industrial operations. Expect a final decision on the OBPS in Budget 2024.
The $15 increase in the carbon tax will cost $584 million in 2023-24 and $780 million in 2024-25 for a total of $1.3 billion. To offset those increased revenues, the government has increased the climate action tax credit and other measures for a total of $412 million and $549 million in 2024-25.
However, the government appears to be retaining a total of $406 million from carbon tax revenues over two years towards general government revenues. This amount represents the additional revenues from those two years only.
Budget 2023 does not reverse the decision to phase out the PST rebate on machinery and equipment, nor does it lower the threshold for the Employer Health Tax, as has been requested by the business community.
The government also announced a partial exemption for new purpose-built rental buildings, though these measures will only reduce planned revenues by $6 million over two years.
- GVBOT President and CEO Bridgitte Anderson is available for media interviews following the budget lockup in Victoria today.
- Minister of Finance Katrine Conroy will give a B.C. Budget Recap to business leaders at the Greater Vancouver Board of Trade this Thursday, Mar. 2, 2023. Click here to learn more.
About the Greater Vancouver Board of Trade:
Since its inception in 1887, the Greater Vancouver Board of Trade has been recognized as Western Canada's leading business association, engaging our members to inform public policy at all levels of government and empowering them to succeed and prosper in the global economy. With a Membership whose employees comprise one-third of B.C.'s workforce, we are the largest business association between Victoria and Toronto. We leverage this collective strength, facilitating networking opportunities, and providing professional development through unique programs. In addition, we operate one of the largest events platforms in the country, providing a stage for national and international thought leaders to enlighten B.C.'s business leaders.