Tax hikes balance BC budget
British Columbia's Liberals turned their backs on more than a decade of devotion to tax cuts and hiked some significant ones Tuesday in a race to balance their books before heading into the May election.
Finance Minister Mike de Jong resorted to raising income taxes for corporations and high-income earners and boosting health-care premiums to help bridge the gap from deficit to surplus.
De Jong's budget tabled Tuesday forecasts a surplus of $197 million for the 2013-2014 fiscal year, while this year's budget posts a deficit of $1.2 billion
"We've fought our way back," he said.
De Jong's budget comes less than three months before the May 14 provincial election in which the Liberals are seeking their fourth consecutive mandate.
It borrows heavily from ideas already floated by the Opposition NDP, which has in the past mused about higher corporate taxes and higher personal levies on the most wealthy. The NDP have consistently led the Liberals in opinion polls.
Opposition New Democrat finance critic Bruce Ralston said he endorsed the Liberal moves toward income tax increases for corporations and the wealthy.
"I'm pleased that the B.C. Liberals, despite their strong attacks on those ideas when they were first mooted, have adopted them," he said.
The budget left members of the business community tersely unhappy. The business community has staunchly backed Liberal policies even as the economic downturn of 2009 forced the government to drastically recalibrate their budget into deep deficit territory despite winning an election on a deficit projected at $495 million.
Jock Finlayson, vice-president of the Business Council of B.C., said the corporate tax increases in the budget would not be a deep concern if taken by themselves. But added together with the province's return to the provincial sales tax, the ongoing carbon tax and the high Canadian dollar, the business community has deepening worries.
"We are quite concerned about the challenges we are facing in B.C. with respect to our competitiveness and unfortunately, this budget really doesn't say much about that," he said.
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