VANCOUVER (Reuters) - British Columbia unveiled its fifth consecutive balanced budget under the ruling Liberals on Tuesday, doling out tax and financial breaks 11 weeks before what is expected to be a tightly contested provincial election race.
Armed with a healthy balance sheet, Finance Minister Michael de Jong said the Western Canadian province would slash medical services premiums (MSP) in a first step toward eliminating them.
The premiums, which do not exist elsewhere in Canada and have irked many residents, help finance the province’s publicly funded medical system.
“The focus on MSP changes is good as it is the most regressive tax we have, but I would have liked them to take a step further and use the surplus to address more pressing needs,” Seth Klein, B.C. director with the left-leaning Canadian Centre for Policy Alternatives, said in an interview. Those included affordable housing and childcare, and poverty reduction, he said.
The budget also contained relief for businesses, including phasing out provincial sales tax on electricity purchases. But the moves may be insufficient to win over voters at the polls on May 9.
After 15 years in power, the Liberal Party is neck-and-neck with the left-leaning New Democratic Party (NDP) with many voters unhappy with the provincial government’s recent approval of the Trans Mountain oil pipeline expansion. The party is not linked to Prime Minister Justin Trudeau’s Liberal Party and is more right-leaning.
A Mainstreet/Postmedia poll this week showed each of the two British Columbia parties having 37 percent of voter support.
An NDP victory could derail big oil and gas projects in the province. Party leader John Horgan has vowed to stop the Trans Mountain project and recently expressed reservations about a liquefied natural gas terminal that Malaysia’s Petronas [PETR.UL] wants to build.
The budget was thin on new housing initiatives even as residents are pushing for more affordable housing, especially in the Vancouver region, Canada’s most expensive real estate market.
The Liberals took steps in the past year to cool prices, including introducing a tax on foreign buyers in Vancouver, who many blamed for soaring house prices.
Earlier, de Jong projected a budget surplus of C$295 million ($224 million) in fiscal 2017-18, C$244 million in 2018-19 and C$223 million in 2019-20.
The revised surplus for the fiscal year ending March 31 is seen at C$1.5 billion, down from C$2.2 billion previously due to higher spending on one-off items such as emergency preparedness.
Reporting by Nicole Mordant in Vancouver; Editing by Phil Berlowitz and Richard Chang