BC Budget 2013-14.

[NAB]

This could earn them a bump in the polls if they actually do it and make it effective this year and not sometime down the road. Perhaps an even greater bump in popularity if they include increased income taxes on the higher end income earners as well and use the money to get rid of MSP Premiums.
Nab

Vaughn Palmer: Corporations likely to be targeted in budget squeeze ahead
By Vaughn Palmer, Vancouver Sun columnist January 30, 2013


Finance Minister Mike de Jong has admitted he’ll have to look at new sources of revenue to help fulfil the B.C. Liberals’ longstanding promise of presenting a balanced budget.

VICTORIA — With budget day less than three weeks away, Finance Minister Mike de Jong is rumoured to be looking at increasing taxes on corporations to ensure the B.C. Liberal goal of tabling a credibly balanced budget.

De Jong has made no secret of the challenge he faces in eliminating the deficit in a way that has a chance of withstanding scrutiny in the Feb. 19 budget lockup.

“It’s not just a question of balancing,” he conceded to reporters at the press conference following the release of the November update on provincial finances.

“We’re going to have to present a budget that will withstand scrutiny, that will show a sufficient surplus as to be credible given the vagaries and the changes that can take place during the year.”

Tough to do in any election year. But the Liberals made the problem worse for themselves by their performance on the last election-eve budget:

Claimed a “maximum” $495-million deficit before election day. Delivered a $1.8-billion deficit afterward.

Adding to the challenge this time is the prospect that economic growth won’t close the gap all by itself because key indicators are headed in the wrong direction.

The projected deficit for the financial year ending March 31 has widened by several hundred million dollars, according to the last update from de Jong.

The government’s independent economic forecasting council recently downgraded its growth projection for the year ahead by a 10th of a point, to 2.1 per cent. A “very, very modest” shift, to be sure, as de Jong noted. Still the Liberals needed more growth, not less.

On the spending side, the Finance Ministry has reportedly fallen short of the budget-balancing goal for the year ahead. Some tens of millions have been saved, but apparently not enough to close a gap estimated at several hundred million dollars at the last financial update.

Still, the Liberals are wedded to the self-imposed need to balance the budget, written as it is into their much-revised (and much mocked) budget legislation. And if growth and spending cuts won’t close the gap all by themselves, then new revenue measures are the other available option.

Pointedly, when de Jong was asked about that possibility last November, he didn’t rule it out.

“As part of the budgeting process do you look at the broad suite of taxes that apply? Yes,” de Jong said. “But the government and I have a bias that mitigates against increasing the tax burden that British Columbians face ... We have been a government that has taken a measure of pride in trying to reduce the tax burden families are facing.”

Taxes on families, taxes on ordinary British Columbians ... I can’t see the Liberals imposing either, especially at a time when the New Democratic Party Opposition is ruling out those kinds of tax increases.

But it would be a different matter if they adopted one of the few tax increases that NDP leader Adrian Dix has proposed, namely raising the corporate income tax to 12 per cent from the current 10 per cent.

The B.C. Liberals have already ventured partway down that road, announcing last year that the corporate rate would rise to 11 per cent effective April 1, 2014.


Suppose, then, that the Liberals moved up the date for increasing the corporate income tax to April 1, 2013, and also matched the NDP point-for-point, meaning the rate would go to 12 per cent.

That would boost provincial revenues by a projected $360 million in the coming financial year, helping to create the comfy cushion needed for de Jong’s budget-balancing exercise.

Nor has it escaped the notice of Liberal insiders that the government could thereby steal thunder from the Opposition and maybe monkeywrench the NDP’s own budget preparations.

Dix has promised to release a fully costed election platform, using the government budget and fiscal plan as a starting point. He’s already announced that some of the additional revenue from raising the corporate tax would be used to pay for improved transit service.

But if the Liberals had already used up two points of room on the corporate income tax to balance the budget, Dix would have to revise his plans accordingly — either raising some other tax, scaling down his promises, or opting for deficit financing.

Poaching the other party’s tax proposals is a cute trick in political terms. But it would be denounced as a cynical tax grab by many on the right of the political spectrum. And business leaders would probably say “too cute by half.”

To be sure, the Liberal-appointed expert panel on business tax competitiveness did say last year that the province “should consider a small increase in the corporate income tax rate.” It also suggested boosting natural gas royalties.

But those recommendations were aimed at trying to raise enough money to provide tax relief for small, medium and large businesses in the transition back to the old provincial sales tax, with its disincentives to growth and investment.

The panel never intended for the government to raise taxes on business or jack up royalties on the resource sector as a way of accomplishing a damn-the-consequences goal of balancing the budget in an election year.

http://www.vancouversun.com/business/bc ... story.html

[maple leaf]

The liberals are out of ideas and have to steal ideas from the NDP,even if it goes against everything they preach (Liberals raising taxes).And you wonder why Dix won't spill the beans on the counter until after the Liberals release this budget .Keeping his cards close to the chest is the best thing he can do.

[maple leaf]

There's a budget comin' down.

And there's an election coming too.

Which might have a few of the Wizards of Snooklandia just a wee bit worried, given that there have been concerns in the past about the veracity of the BC Liberal Government's budget projections pre- vs post-....

Election.

Luckily, though, we still have a demonstrably independent Auditor General around (at least for the time being) who can have a look at things and tell us what's what before we vote, right?

Wrong.....

Here's the press release straight from the Belly of the PAB-Bot-Beasts itself that strongly suggests they are going to do their best that this does not, in point of fact, happen:
***********
VICTORIA - The B.C. government has appointed nationally respected economist Dr. Tim O'Neill to review and assess the economic and revenue projections contained in the upcoming provincial budget, Finance Minister Michael de Jong announced today.

A former chief economist and executive vice-president for the Bank of Montreal, O'Neill will review the work undertaken by finance ministry staff as Budget 2013 is finalized, with a specific focus on the underlying methodologies, processes and material assumptions the government has used in preparing its economic and revenue forecasts.

O'Neill will have the opportunity to review and evaluate all material supporting the Province's economic and revenue forecasts for the 2012-13 through 2015-16 fiscal years, and he will have complete access to Finance ministry staff as needed.

O'Neill will provide the Minister of Finance with a written assessment of the minister's economic and revenue forecasts. He will also be available on budget day to speak about this review...

{snippety doo-dah}

...Finance Minister Michael de Jong -

"Given the ongoing economic uncertainty both in Canada and around the world over the past few years, I believe an external review of our economic and revenue forecasts makes sense at this time. It will also provide British Columbians with added assurance that Budget 2013 is based on sound revenue and economic forecasts."...

***************

Look, no offense to Mr. O'Neill who seems to do this kind of thing for a living, but a group being reviewed does NOT bring in the reviewer itself and call that independent, which is how they are trumpeting this in the public prints.

In addition, this codswallop about how the reviewer will be there to explain the budget projections on budget day itself, at a time when it is Mr. de Jong's duty to explain said projections himself as a representative of the government, is egregious in the extreme.

Therefore, given that, it is my opinion that this is little more than PR cover-publicity/deflector spin stunt.

Which, once again demonstrates that Ms. Clark, her Wizards, and her Ministerial Minions have absolutely no intention of actually governing.

Instead, it really and truly appears that their only intent is to obfuscate just long enough to win an election.

I mean, seriously, can you imagine this bunch unleashed, once again, for four more years?

How much would we owe to IPP's by then...$100 billion? $500 billion? A cool trillion?

Sheesh.

.
Posted by RossK at Thursday, January 31, 2013 9 comments
http://pacificgazette.blogspot.ca

[steven lloyd]

Which, once again demonstrates that Ms. Clark, her Wizards, and her Ministerial Minions have absolutely no intention of actually governing.

Instead, it really and truly appears that their only intent is to obfuscate just long enough to win an election.

I mean, seriously, can you imagine this bunch unleashed, once again, for four more years?

How much would we owe to IPP's by then...$100 billion? $500 billion? A cool trillion?

Sheesh.

Anyone who thinks that the Liberals aren’t capable of doing mass damage given another 4 years is truly naive.

[NAB]

"Stagnant B.C. needs renewal"

""A new report on personal incomes upends almost everything we thought we knew about taxation, incomes and wealth. The report, by Statistics Canada, is a 30-year look-back on how well, or poorly, we all made out.

>>>>>>snip

There are warnings here for whichever party wins the provincial election in May.

Policies that divide us, whether by favouring one group or hammering another, have not worked. Raising or lowering the profile of government hasn’t had much impact, either.

The challenge facing B.C. is more basic. We’ve lost our competitive position and we are too reliant on fading industries like lumber and the fishery.

If there is a dominant message in those income numbers, it is this: Canada needs a new approach to economic strategy, and B.C. more than anywhere.""

http://www.timescolonist.com/opinion/ed ... al-1.64749

[steven lloyd]

The challenge facing B.C. is more basic. We’ve lost our competitive position and we are too reliant on fading industries like lumber and the fishery.

If there is a dominant message in those income numbers, it is this: Canada needs a new approach to economic strategy, and B.C. more than anywhere."

The mining industry is going to boom up here over the next few years. We will be exporting Liquified Natural Gas and could export oil as well. All we need now is to drill for methane gas in the Klappan and for oil off the coast - and rid ourselves of incompetent and corrupt governments. Everyone vote Conservative and adjust your investment portfolios accordingly.

[sooperphreek]

if places like the mine gibraltar think small like they do making you stay off site with no accommodation then they wont be competitive. if i can go to alberta and stay in residence and have a gorgeous weight room and a huge gym why would i want to work in BC? their attitude towards the lifeblood (the workers) has to change. make it appealing to workers and then the jobs will take care of themselves. same in fort st john. that place is a hole. and they have no room for all the workers they need. that should be the focus and direction.

[msj]

"Taxation by stealth" - The Liberals know how to do it!


Tuesday, December 4, 2012
Basic deduction thresholds reduced

Retreat from HST = income tax windfall

Campbell River Mirror -- An unintended consequence of the HST debacle may be an income tax windfall for the cash-strapped Liberal government as it attempts to balance its 2013 budget.

In its retreat to the PST/GST the government will reduce the income tax deduction thresholds of all British Columbians on Jan. 1st. While ardently claiming to be offering its hard working citizens the most attractive income tax regime in the country, the Liberals are poised to collect more income tax next year by way of a $1,000-plus reduction of the basic and spousal pre-tax income thresholds.
[snip]

My accounting sources say the lower basic personal amount is a consequence of moving back from the HST to the PST effective April 1, 2013. When the HST was introduced there was an increase in the basic personal amount at the provincial level but that increase will no longer be in place when we go back to the PST.
[snip]

“In all my years I’ve never seen anything like this. Unlike all other jurisdictions B.C. is negatively adjusting the basic and spousal personal exemptions for 2013 thereby effectively pushing through a personal income tax increase under the radar,” Conover says. [/b]

A senior federal revenue official says: “British Columbia has traditionally utilized the indexing method for the basic personal amount. Effective January 1, 2013, however, the amounts have been legislated without indexing. The amounts as stated in the T4127 have been confirmed as correct by the government of British Columbia.”

http://www.briankieran.com/2012/12/basi ... mment-form

Given that the referendum was meant to take us back to the way things were prior to HST why is there any complaints on this?

The basic exemption was $9,373 in 2009 and would have been scheduled to go up to about $9,410 for 2010 under the indexing methods used for 2009/2010.

Instead, since the HST was introduced, the basic exemption was lifted to $11,000 in 2010 which is about a $1,600 difference which at the 5% tax rate means about $80 in tax savings.

Then for 2011 it was raised up to $11,088 and then in 2012 to $11,354.

For 2013 it has been lowered to $10,276 due to a return to the PST.

Is that amount not where it would have been had the HST never been implemented?

From $9,373 in 2009 to $10,276 in 2013 implies inflation of about 2.2% per year (on average) which seems about right (but I haven't checked so maybe not...).

[NAB]

Well, tomorrow is the big day for those who still think government budgets have much of anything to do with the real world!

A hired "expert" was brought in to cast an opinion on the government's revenues projections and gave it a clean bill of health pretty much as expected, (with a meaningless little peanut adjustment of "up to" 70 million thrown in to provide an appearance of careful and unbiased scrutiny ;-) )
Nab

VICTORIA — A former Bank of Montreal chief economist hired by the B.C. government to review its budget says the numbers are OK, but recommended the Finance Ministry scale back its forecasts for natural gas revenues by up to $70 million.

The review by Tim O’Neill was released Monday, a day before B.C. Finance Minister Mike de Jong was set to table what he says will be a balanced budget.

O’Neill’s 22-page report called for additional prudence for natural gas revenue projections for this year’s budget and budgets for the following two years.

The report said B.C.’s natural gas revenue projections have been overstated in five of the last eight years and O’Neill suggested extra caution is needed when factoring those revenues, especially since natural gas prices are at record lows.

“Given the persistent overestimation of natural gas revenues in recent years and the material negative impact on total revenue expectations, it would be wise for the budget to incorporate price forecasts closer to the lower bound of the private sector forecast range than is contemplated in the projections that were reviewed,” said the report.

O’Neill’s report recommended the budget base its natural gas revenue projections on a natural gas price that ranges between $1.80 and $1.90 a gigajoule.

O’Neill’s report said if the government based its natural gas revenue projections on a price at $1.85, that would lower the Finance Ministry’s budget estimate numbers between $60 million and $70 million.

A government source said last week that the Finance Ministry had revised its budget numbers after receiving O’Neill’s report. The source wouldn’t say how deeply it cut into its original revenue projections.

Last September, de Jong said declining natural gas revenues had blown a hole in the government’s budget plans.

He said the three-year forecast for natural gas revenue was $1.9 billion, but price drops cut that estimate by $1.1 billion. De Jong said the price for natural gas was $6.33 a gigajoule in 2008, but dropped to $2.15 this year.

Materials provided by the Finance Ministry during de Jong’s quarterly update last September stated that every 50-cent change in the price of natural gas equals revenue changes of plus or minus $72 million to $110 million.

The report came just a week after the Liberal government’s Throne Speech predicted B.C. could reap at least $100 billion in revenues generated by exports of liquefied natural gas over the next 30 years.

As for the general budget projections, O’Neill’s report found everything pretty much in order.

“I have concluded that there are no glaring problems or inadequacies that need to be addressed,” the report states.

http://www.theprovince.com/news/vancouv ... story.html

[flamingfingers]

Well, tomorrow is the big day for those who still think government budgets have much of anything to do with the real world!

A hired "expert" was brought in to cast an opinion on the government's revenues projections and gave it a clean bill of health pretty much as expected, (with a meaningless little peanut adjustment of "up to" 70 million thrown in to provide an appearance of careful and unbiased scrutiny ;-) )
Nab

I posted an article of Martyn Brown's here:

viewtopic.php?f=26&t=44344&start=450

That included a little gem from him that perhaps cheerleaders may have overlooked:

Note that O'Neill has not been asked to evaluate the government's spending assumptions for the coming year, which is half the equation of ascertaining whether any balanced budget forecast is credible.

[NAB]

I think it is a pretty fair assumption that by the end of March 2014 they will have spent everything that comes in, plus a whole bunch more, ...regardless of their budget numbers. Remember, their "plan" calls for an increase in the provincial debt of roughly 10 billion dollars over the next two years :purefury:

Nab

[Veovis]

I am curious to what they will put out tomorrow. Will it have legs in reality or another speech about 100 billion in "potential" future revenues.

[NAB]

Tuesday’s B.C. budget more a campaign ad than anything else
Brian Hutchinson | Feb 18, 2013 8:48 PM ET | Last Updated: Feb 18, 2013 11:00 PM ET

B.C. finance minister Mike de Jong will present a “balanced” budget on Tuesday morning. It’s meant as good news, but taxpayers may find it hard to swallow, given the provincial government’s inability to nail its forecasts. There’s another caveat, of course: This is a pre-election budget.

Even under normal circumstances, 18 months would have to pass before the numbers could be gauged as accurate or not. That’s how budgets work. They are predictions, based on best available information, guesswork and some wishful thinking, and they’re always subject to changing circumstances and unforeseen events.

There’s been some talk in Victoria that Mr. de Jong’s budget might not survive a vote on Tuesday, thanks to his Liberal party’s dwindling majority in B.C.’s legislative assembly, and to alleged dissenters in the ranks. Such a scenario could trigger an early election. But even NDP finance critic Bruce Ralston says he thinks a Liberal rebellion is unlikely.

Should the budget survive first reading, there’s still no chance of it coming into force. Various measures and spending estimates can’t be debated and examined by committees prior to the provincial election in May; there simply isn’t enough time in the current, truncated legislative session. A second budget will have to be tabled in September or October, by whatever party — Liberals or NDP — that forms the next B.C. government.

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.
Tuesday’s budget is to be little more than an early campaign exercise, and, like last week’s throne speech, should be taken with a large pinch of salt. Or two. In the speech, the government suggested that royalties accrued from proposed liquified natural gas projects in B.C. could allow the province to pay off its nearly $60-billion debt within the next 15 years. (That's what, approximately $13,000.00 against every man, woman, and child in BC - not $8408.00 ;-) Nab) It might even eliminate the provincial sales tax.

That was some fanciful, long-term thinking. For now, Mr. de Jong must offer an economic vision that he and Premier Christy Clark can pitch on the hustings. Their “balanced” budget promise can be heavily discounted, if not dismissed outright, but the Liberals have to make it. Ms. Clark has been pledging a return to surplus for the past year. And a previous Liberal cabinet led by her predecessor, Gordon Campbell, was projecting a return to the black — by fiscal 2013/14 — in September, 2009. Reneging would reduce even further the Liberals’ chances of re-election in May.

Of course, British Columbians are skeptical of Liberal promises. Exactly four years ago — and three months before the last provincial election — B.C’s then-finance minister, Colin Hansen, stood in B.C.’s legislative assembly and presented a hard-times agenda. To many at the time, his budget seemed realistic. B.C. was in the grip of an unfolding global economic crisis. Mr. Hansen did a reasonable job of persuading voters that his government could wrest the province free with another mandate, its third since 2001.

He forecast a budget deficit of almost $500-million for the coming fiscal year, a dismal reversal of fortune in a province that had recently recorded a $2-billion surplus, but British Columbians could accept that their province was caught in a maelstrom not entirely of its own making.

The Liberals were returned to power, but just barely: The party collected 60,000 more votes in the May 2009 general election than the NDP.

Events that followed shifted B.C.’s political landscape, and repercussions are still being felt. Without warning, Mr. Hansen introduced a harmonized sales tax. The HST became integral to a completely overhauled, post-election budget presented in September 2009. And the government revised its deficit forecast dramatically, from $495-million to a staggering $2.78-billion. In fact, the deficit came in at $1.8-billion. But the wild swings between forecasts and the actual result did not inspire confidence.

The government’s predictions failed in successive years. A $1.75-billion deficit was forecast for 2010/11; the result was actually better, something closer to $1-billion. For fiscal 2011/12, the government projected a $925-million deficit, but that ballooned to $2.5 billion.

A $968-million deficit was forecast for the last fiscal year, and then moved to a $1.475-billion shortfall. The actual amount could be more, or it could be less; we simply don’t know, because the final results aren’t in. This year, the government hired former Bank of Montreal chief economist Tim O’Neill to review the latest forecasts, before their release on budget day. Mr. O’Neill’s report was made public Monday. It has a number of recommendations, “including one significant suggestion on the natural gas price forecast that required a last-minute adjustment to the Province’s fiscal plan,” according to a government press release.

“Overall I was satisfied with the degree of prudence included in this budget,” said Mr. O’Neill. “It’s important to avoid excessive optimism in revenue projections when full-

scale economic recovery has yet to take hold.”

That might not square with previous provincial budgets. That’s the problem with forecasts, especially in B.C. Especially three months before a pivotal election.

National Post

http://fullcomment.nationalpost.com/201 ... hing-else/

[NAB]

"Budget 2013 will be available here as soon as the
Minister of Finance stands in the House to deliver
the Budget Speech (approximately 2:00 pm)
on Budget Day, February 19th, 2013."

http://www.bcbudget.gov.bc.ca/default.htm

ort watch the webcast live here..

http://www.leg.bc.ca/hansard/webcasts/#

[Logitack]

geez, the liberals are going to RAISE taxes...what? how can that be from a government and supporters who insist that raising taxes is bad for the economy

Effective in January 2014, the province is introducing a temporary two-year, 2.1-per-cent personal income tax hike for those earning more than $150,000 a year.

The general corporate income tax rate will increase one percentage point to 11 per cent from 10, effective April 1, 2013.

Medical Services Plan premiums will increase by about four per cent in January 2014.

obviously businesses will be exiting BC now due to this corporate tax increase.... isnt that what the liberals and their supporters continually say about the other party when they increase taxes? you betcha...

and of course the good ol MSP is going up yet again!