On Tuesday, Feb 22, the NDP B.C. Government released Budget 2022: Stronger Together.
Below is a quick overview of the key highlights from the announcement and what it means for our industry and members.
This is the second budget tabled by Minister of Finance Selina Robsinson. As the pandemic comes closer to an end, the Government is expanding focus beyond only health care and starting to look forward to economic recovery, climate, reconciliation, infrastructure and affordability.
Budget by the numbers: 2021/2022:
- Revenue: $3.25B (Property Transfer Tax), $1.9B (ICBC), and $4.1B (Natural Resources)
- Deficit: $483M
- Debt: $61.7B in taxpayer-supported debt, which is a 17.8% taxpayer-supported debt-to-GDP ratio
- Economic growth forecast: 5%
The deficit is significantly less than the initially projected $9.7B as a result of a hot real estate market which essentially underwrote this budget through the Property Transfer Tax revenue, an ICBC turnaround and the strong natural resource industry. Economic growth over 2021 also contributed to these favourable results.
Budget 2022/2023 Projections:
- Revenue: $2.5B (Property Transfer Tax), $327M (ICBC), and $3.4B (Natural Resources)
- Deficit: $5.5B
- Debt: $73.5B in taxpayer-supported debt which is a 20% taxpayer-supported debt-to-GDP ratio
- Economic growth forecast: 4%
Looking ahead to 2022, the deficit is projected to balloon to over $5B, and revenue to drop in all three areas that contributed to the 2021 results, most notably that from ICBC. Economic growth will also be slightly down from 2021 but remain in a strong position. Other significant factors contributing to the much higher deficits are what the Government is describing as record level spending on capital projects and billions of dollars in contingencies.
What does this mean to our members and industry?
The BC Government is committed to making investments in the labour force and the environment. Both areas could be good news for our members and industry.
Firstly, there is an an investment of $21M to certify more skilled trade professionals as journey people or apprentices by increasing training seats and other services to support workers of mechanical and electrical trades.
Secondly, a major focus for the Government is to fight climate change by increasing the CleanBC budget by more than $1B to a total of $3.3B. The strong focus to retrofit existing multi-unit residential and commercial buildings to meet CleanBC standards by April 2025 now includes a Clean Buildings Tax Credit to incentivize major retrofits.
More than $1 billion in new funding for CleanBC and the Roadmap to 2030 was included. A carrot and a stick are being used to make heat pumps more affordable by adding a PST exemption to heat pumps and an increase of PST to 12% on fossil fuel heating equipment.
There was also additional support for energy efficient buildings by continuing incentives through the CleanBC Better Homes, Better Buildings program.
They introduced a Clean Buildings Tax Credit to encourage major retrofits for multi-unit residential and commercial buildings to meet CleanBC standards, effective April 1, 2022, and expiring April 1, 2025.
MCABC will keep a close eye on these programs and investments to keep members informed of the availability and options for our workforce and your customers.
In the meantime, let us know what your thoughts and observations are from Budget 2022 by sending us an email.