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

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Fruit farmers in the Okanagan and Creston valleys are in desperate need of cherry harvesters amid COVID-19 work shortages. (Photo: Unsplash/Abigail Miller)
‘Desperate’ need for workers at Okanagan cherry farms

Fruit farmers are worried they’ll have to abandon crops due to COVID-19 work shortages

A tent housing a mobile vaccination clinic. (Interior Health/Contributed)
Over 5K jabbed at Interior Health mobile COVID-19 vaccine clinics

The clinics have made stops in more than 40 communities since launching last week

Provincial Health Officer Dr. Bonnie Henry talks about B.C.’s plan to restart the province during a press conference at Legislature in Victoria, Tuesday, May 25, 2021. THE CANADIAN PRESS/Chad Hipolito
Interior Health COVID-19 cases falling slower than the rest of B.C.

More than a third of provincial cases announced Thursday came from the Interior

The Greater Vernon Chamber of Commerce will host the Valley Wide Business Expo May 4 at Predator Ridge Resort. (photo submitted)
Golf raffle helps Okanagan families score homes

Habitat for Humanity Okanagan swinging into action this summer with a new raffle

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

FILE – Most lanes remain closed at the Peace Arch border crossing into the U.S. from Canada, where the shared border has been closed for nonessential travel in an effort to prevent the spread of the coronavirus, Thursday, May 7, 2020, in Blaine, Wash. The restrictions at the border took effect March 21, while allowing trade and other travel deemed essential to continue. (AP Photo/Elaine Thompson)
Feds to issue update on border measures for fully vaccinated Canadians, permanent residents

Border with U.S. to remain closed to most until at least July 21

A portion of the George Road wildfire burns near Lytton, B.C. in this Friday, June 18, 2021 handout photo. THE CANADIAN PRESS/HO, BC Wildfire Service *MANDATORY CREDIT*
Blaze near Lytton spread across steep terrain, says BC Wildfire Service

Fire began Wednesday and is suspected to be human-caused, but remains under investigation

Jaimee Peters photo of a Willow Midwives helping with a birth. Willow closed its doors March 31 because of a shortage of midwives. (Contributed)
South Okanagan’s only midwifery to re-open this summer

Willow Community Midwives was forced to close because of a shortage of midwives

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

Gord with a mom and her young son outside Pathways which was defunded on May 31. (Facebook)
Gord Portman with a mom and her child outside of Pathways. The sign says it all about the difference Pathways has made in people’s lives. They were defunded by Interior Health on May 31.
Penticton man takes the plunge for the recovery house that helped save his life

Gord Portman said Discovery House and Pathways have been everything in his 1 year sobriety

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed Eli Beauregard facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Most Read