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B.C. budget surplus should have been better spent, say critics

02/18/2015 10:48 EST | Updated 04/20/2015 05:59 EDT
Critics are questioning why the B.C. government is not using its $879 million budget surplus to put more money into key services.

- TOPIC B.C. Budget 2015 | full online coverage

Finance Minister Mike de Jong said yesterday that the extra cash is going to be used to reduce the province's debt, rather than pay for services.

But Iglika Ivanova from the Canadian Centre for Policy Alternatives disagrees with that approach.

"Now that we are no longer poor, we don't have the excuse the economy is doing very poorly. Why are we not investing in our people?" said Ivanova.

The province will be allowing parents on social or disability assistance to keep all of their child support payments starting next September, rather than deducting the cash from their government cheques.

But as child and youth advocate Mary-Ellen Turpel Lafond points out, that measure will only cost the government about  $11 million per year.

"We're not seeing an opening of the government coffers in the big systems like education ... and children's mental health."

Education funding stalled

Likewise, Jim Iker,  president of the B.C. Teachers' Federation, was disappointed the only new money the school system received is to fund the new teachers' contract.

Iker says other rising school board expenses such as MSP premiums and new programs like My Education B.C. are not getting the funding increases they need.

"The budget doesn't cover the cost of inflation," said Iker.

Instead the government is asking B.C.'s school boards to cut $29 million from their budgets.

However there could be more money coming for schools. That is because the government is currently in court with the union in a battle over class size and composition.

If the teachers win in court and the government is ordered to return to 2001 class size and composition levels, that could cost the government an estimated $1 billion.

Finance Minister Mike de Jong said the government is prepared for any financial penalties it may have to pay.

"It's one of the reasons we provide contingencies, and fairly healthy ones in the years ... ahead," said de Jong.

Middle class overlooked

Meanwhile Opposition Leader John Horgan said the budget panders to the Liberal government's wealthy supporters by rolling back a temporary tax hike on people earning more than $150,000 per year.

He said an NDP government would have used the surplus to give a break to middle-income earners, not to the wealthy, because working families are already being hit with fee increases on MSP payments, BC Ferries rates, BC Hydro rates and ICBC premiums.

"Clearly, there is money available to try and address some of the challenges that middle-income families are facing."

"There was no effort made to address those people, the majority of British Columbians, who are struggling from pay cheque to pay cheque," said Horgan.

Top grade from business

Not everyone was unhappy with the healthy surplus booked by the government.  The Vancouver Board of Trade gave the government an A grade for its budget.

CEO and former B.C Liberal MLA Iain Black applauded the province's diversification of resources and debt management.

"To see the [deficit] come down the way it has over the last number of years to aggressively get us back to where we were before the recession is a very, very important step. It is returning borrowed money," said Black.

He added the Board of Trade supports the budget because the government invested in key sectors such as aerospace, shipping and mining without raising taxes.

Despite the government's surplus, B.C.'s overall provincial debt will continue to climb in the years ahead because of spending on capital projects. It is forecast to rise from about $64 billion this year to more than $70 billion by 2017.

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