The B.C. budget delivered this afternoon said little about new ways to draw tourists to the province, but it did provide a small increase to the budget for the Ministry of Tourism, Arts, Culture and Sport.
That ministry's funding is set to rise to $182 million in the 2023-2024 fiscal year, which starts April 1 – a 5.2-per-cent increase.
The increase in that ministry's budget is larger than the 2.65-per-cent increase in spending on all ministries, programs and agencies, according to today's budget. Spending on all B.C. ministries, programs and agencies is set to rise to $81.206 billion in the 2023-24 fiscal year, up from $79.108 billion in the current fiscal year.
The budget mentions a $20-million "tourism initiative envelope," which is a described as a pandemic recovery contingency. The funding is to support ongoing economic recovery efforts for the tourism sector, based on ministry priorities.
In total, the B.C. government is budgeting $1 billion in the 2023-24 fiscal year on pandemic recovery contingencies, with $875 million of those dollars going to health management for COVID-19. The remaining $105 million of that $1-billion contingency fund is split, with $20 million going to support "vulnerable populations," while $85 million is unallocated but available for health or recovery measures, the budget says.
"The tourism sector is expected to gradually improve as it continues to adjust to challenges such as higher costs and labour shortages, which have disrupted the industry’s economic recovery," the budget notes.
Many advocates in the tourism sector told BIV earlier this month that the biggest ask they had from the provincial government was to reduce its employer health tax, which is a tax on business owners' payrolls. The government is set to rake in $2.7 billion from the employer health tax in the 2023-24 fiscal year.
The government dashed business owners' hopes that the tax would be cut. Indeed, the government forecast that "over the next two years, revenue growth [from the employer health tax] is expected to average 4.8 per cent annually, consistent with growth in wages and salaries."
The way the employer health tax works is that restaurant owners, for example, tally up all employee costs, including tips and benefits, for each specific restaurant that they own, and if the total cost for a year is less than $500,000, they do not need to pay any payroll taxes. If their payroll is between $500,000 and $1.5 million, they pay 2.925 per cent on the amount of payroll that is above $500,000. If their employee compensation is above $1.5 million, they must pay 1.95 per cent on their entire payroll.
The government has not yet announced how much minimum wages are set to rise on June 1, when it has said that it will raise the minimum wage. Last year, the minimum wage in B.C. rose by 2.96 per cent. Hospitality sector employers expect the minimum wage to be much higher this year because inflation has been much higher than it was in March 2022, when the government announced last year's minimum-wage hike.
Many tourism industry professionals were travelling today to Prince George, where they are attending the BC Tourism and Hospitality Conference.