Car dealers are applauding a $42 million top-up of incentives for electric and hydrogen vehicles sales in the provincial budget, and business groups are generally applauding incentives that lower the cost of living for oringary British Columbians.
But the same business groups are also warning that the government is not taking the necessary steps to insulate B.C.’s economy from shocks that could come from a slowing global economy, and may be committing itself to expensive programs it may not be able to support in an economic downturn.
The Greater Vancouver Board of Trade (GVBOT) awarded Finance Minister Carole James a B- for the budget she handed down today, February 19.
“Budget 2019 was a ‘steady as we go’ budget,” said GVBOT CEO Iain Black. “However, it is also a budget built and balanced on a series of tax increases made last year that have now started to impact employers.
“There were meaningful investments in child benefits starting in 2020, which will help some families with affordability challenges. Economically, though, we are concerned there were few meaningful announcements with respect to productivity, competitiveness, and economic growth.”
Many B.C. employers that currently pay their employees’ Medical Services Plan (MSP) premiums will be hit this year with a double-whammy.
They will not only still be paying half the cost of those MSP premiums – before they are eliminated entirely – this year they will also start paying the new employee health payroll tax that will replace MSP premium revenue.
And since municipalities are also facing the same double-hit, they are likely to pass on their increased costs to taxpayers, including businesses, in the form of municipal tax hikes.
“A new Employers’ Health Tax, an increasing carbon tax, a rising minimum wage, climbing corporate tax rates – these costs are weighing down the backbone of B.C.’s economy,” said chamber president Val Litwin.
“Beyond a number of limited tax enhancements, we didn’t see anything today that will materially help B.C.’s SMEs (small and medium-sized enterprises) compete in the years ahead, and our data shows there are storm clouds looming.”
Environmental groups, from the David Suzuki Foundation to the Pembina Institute applauded the $902 million that the budget earmarks for its CleanBC plan, which includes incentives for home energy efficiency retrofits and additional funding for electric vehicle subsidies.
In addition to topping up the subsidy for the CEVforBC subsidy for electric and hydrogen fuel cell vehicles, the budget also allocates $30 million for more fast-charging infrastructure, hydrogen fueling stations, more home and business EV charging and highway charging stations at rest stops.
“These key investments will help continue B.C.’s nation-leading adoption of clean energy vehicles in the next three years, as we engage with government on the development of a workable system for Zero Emission Vehicle sales quotas across B.C. beginning in 2025,” said Blair Qualey, president of the New Car Dealers Association of BC.
He referred to zero emission vehicle mandate announced last year that will require 10% of all new auto sales in B.C. to be some form of low-emission vehicle (electric, hybrid or hydrogen).
The Business Council of BC welcomed some of the programs designed to address the high cost of living in B.C., including a new child benefit, which is more than double the previous child tax benefit that it replaces, and applies for children up to the age of 18.
But it warned that the B.C. government does not seem to be taking seriously enough the signals that a global economic slowdown may be looming.
“While government is putting more resources into a variety of worthwhile program areas, including child care, housing and anti-poverty initiatives, paying for this requires a competitive and growing economy,” said Jock Finlayson, BCBC’s chief policy officer.
“The budget does not pay sufficient attention to the headwinds facing the economy due to slower global growth and rising tax and regulatory costs here at home. We wonder where future economic growth will come from to support the spending measures outlined in this budget over time.”