MSP hike off as real estate lifts B.C. budget surplus

Property transfer tax expected to rake in nearly $1 billion more than planned for 2016

B.C. Finance Minister Mike de Jong.

The B.C. government has scrapped a planned medical premium increase next year now that the province’s surplus has ballooned to nearly $2 billion.

The red hot real estate market is a big factor behind the improved financial picture detailed in the first quarter budget update released Thursday.

Property Transfer Tax revenues for 2016 are now forecast at $2.1 billion – an increase of $965 million over the budget – with $165 million projected to come from the new 15 per cent tax on foreign buyers of Metro Vancouver homes.

The property transfer tax now far eclipses the $1.2 billion in forecast gambling revenue from the B.C. Lotteries Corp. and is just short of the $2.35 billion B.C. gets from all forestry, natural gas and other resource royalties.

The currently forecast surplus for the year of $1.94 billion is up from $264 million in the budget. And that’s after the province set aside $500 million for new housing priorities and other yet-to-be-announced measures.

“About half the value of the increased revenue from the Property Transfer Tax – $500 million – will be invested in new programs to benefit housing affordability and $400 million will be invested in the B.C. Prosperity Fund as a legacy for future generations,” Finance Minister Mike de Jong said.

The province is forecasting stronger 2.7 per cent economic growth for B.C. for 2016, up 0.3 per cent from budgeted.

The B.C. government now forecasts continued balanced budgets with surpluses of at least $900 million in each of the next two years.

De Jong said the higher revenues have allowed the government to cancel its planned four per cent increase to Medical Services Plan premiums set for Jan. 1 that would have increased costs for an adult by $36 a year.  Premiums will go down four per cent for those who are eligible for premium assistance.

Canadian Taxpayers Federation B.C. director Jordan Bateman said the MSP premium freeze is a positive step but no great cause for celebration.

“This comes after 15 years of straight increases, more than doubling it on their watch,” he said. “So we’re not planning a parade for these guys and we still want to see (MSP premiums) scrapped completely.”

Bateman said the B.C. government uses medical premiums, rather than some more direct form of taxation for health care, so it can claim low overall taxes compared to other jurisdictions.

“A family like mine is paying $150 a month in this tax, yet it’s not calculated as part of the overall tax burden by government.”

He said the move to scrap the MSP hike shows the government is feeling pressure on cost-of-living issues.

Bateman also cautioned that revenue from the Property Transfer Tax may have peaked if the foreign buyers tax has indeed cooled what was a frenzied market with record sales and fast price gains.

Just Posted

Busy as a bee in a lavender field

Bees are in abundance at Shamrock Farm off Anderton Road flocking to… Continue reading

Market Day crowds flock to downtown Courtenay

Fifth Street in downtown Courtenay was packed Saturday morning as people flocked… Continue reading

Marine tourism a driving force for Vancouver Island’s economy

State of the Island Economic Summit takes place Oct. 23-24

19 Wing Comox welcomes new wing commander

Col. Dany Poitras assumed command of 19 Wing Comox

Pacific Salmon Foundation contributes $42,000 to Comox Valley wild salmon restoration projects

The Pacific Salmon Foundation announced it is contributing more than $42,000 to… Continue reading

Jets host peewee baseball tourney

The Comox Valley peewee A Jets baseball team is hosting a 10-team… Continue reading

Vancouver Island teens missing after vehicle found ablaze near Dease Lake, BC

RCMP say a body discovered nearby not one of the missing teens

A year later, ceremony commemorates victims of the Danforth shooting

It’s the one-year anniversary of when a man opened fire along the bustling street before shooting and killing himself

Japanese Canadians call on B.C. to go beyond mere apology for historic racism

The federal government apologized in 1988 for its racism against ‘enemy aliens’

B.C. VIEWS: NDP pushes ahead with Crown forest redistribution

This isn’t the time for a radical Indigenous rights agenda

Two dead in two-vehicle crash between Revelstoke and Golden

RCMP are investigating the cause of the crash

Ottawa fights planned class action against RCMP for bullying, intimidation

The current case is more general, applying to employees, including men, who worked for the RCMP

Alberta judge denies B.C.’s bid to block ‘Turn Off the Taps’ bill

He said the proper venue for the disagreement is Federal Court

Most Read