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.

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

Tuesday’s Lotto Max draw went unclaimed. (Photo courtesy of BCLC)
Tuesday’s Lotto Max draw went unclaimed. (Photo courtesy of BCLC)
Lotto Max jackpot goes unclaimed again

42 of the 64 Maxmillion prizes of $1 million were won, the majority were sold in Ontario

A cougar, or cougars, went on a killing rampage at a small Fruitvale farm. Photo: Thomas S. on Unsplash
Cougar euthanized after taking out small animal farm in Fruitvale

Wildlife interactions, poachers or polluters should be reported to RAPP at 1.877.952.7277

The Trail Smoke Eaters will open the 2021 season on Oct. 8 against the Cranbrook Bucks in Cranbrook, and will have their home opener the next night against the same Bucks. Photo: Jack Murray
BC Hockey League announces 54-game schedule to begin in October

Trail Smoke Eaters open season with home-and-home series versus Cranbrook Bucks

“The Spirit of Family” enhances the Beaver Valley both in the daytime and at night. Photo: Submitted
Family sculpture installed at the Fruitvale Memorial Hall

Locals are encouraged to swing by Fruitvale Memorial Hall to take a… Continue reading

In 1927, swimmers enjoyed a day in the water at the CGIT and CSET Camp in Summerland. While none of the people in this photograph have smart phones, there is some debate about whether a beach image from the United Kingdom in 1943 shows a man using a smart phone. (Photograph courtesy of the Summerland Museum)
COLUMN: The mystery of the time-travelling tourist

Was the man in a 1943 photograph checking his smart phone?

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

(Black Press Media file)
Dirty money: Canadian currency the most germ-filled in the world, survey suggests

Canadian plastic currency was found to contain 209 bacterial cultures

(pixabay file shot)
B.C. ombudsperson labels youth confinement in jail ‘unsafe,’ calls for changes

Review states a maximum of 22 hours for youth, aged 12 from to 17, to be placed in solitary

Grace (left), a caribou that was born in a maternal pen north of Revelstoke, is alive and well said the province. It appears she even has a calf. Maternity pens aim to increase caribou calf survival by protecting them from predation until they are older and less vulnerable. (Contributed)
For the first time in years, caribou numbers increasing near Revelstoke

North herd growing but south herd still concerning

Eleonore Alamillo-Laberge, 6, reads a book in Ottawa on Monday, June 12, 2017. THE CANADIAN PRESS/Sean Kilpatrick
Parents will need to fight ‘COVID learning slump’ over summer: B.C. literacy experts

Parents who play an active role in educating their children this summer can reverse the slump by nearly 80%, says Janet Mort

Kelowna General Hospital. (File photo)
COVID-19 outbreak at Kelowna General Hospital declared over

Three people tested positive for the virus — two patients and one staff — one of whom died

The border crossing on Highway 11 in Abbotsford heading south (file)
Western premiers call for clarity, timelines on international travel, reopening rules

Trudeau has called Thursday meeting, premiers say they expect to leave that meeting with a plan

The B.C. government’s vaccine booking website is busy processing second-dose appointments, with more than 76 per cent of adults having received a first dose. THE CANADIAN PRESS/Jonathan Hayward
B.C.’s COVID-19 infections, hospitalizations stable for Tuesday

108 new confirmed cases, 139 in hospital, 39 in intensive care

Most Read