The B.C. government has introduced the B.C. Child Opportunity Benefit in its latest budget, which is based on income and will replace the current Early Childhood Tax Benefit.
According to the government, instead of ending at age six, the Child Opportunity Benefit will continue until the age of 18.
The maximum annual benefit for the first child is $1,600 compared to $660 under the current benefit. The maximum benefit is $1,000 for a second child and $800 for each subsequent child under the age of 18.
This means a family earning up to $25,000 a year with one child will receive $28,800 over the child’s upbringing or $1,600 annually. A family earning up to $25,000 with two children will receive at least $46,800 over the children’s upbringing or $2,600 annually.
The benefit is phased out at a rate of four per cent of family net income over $80,000. The $25,000 to $80,000 will be indexed to inflation in future years.
The income level where the new benefit is fully phased out varies based on the number of children in a household. For example, a family with one child will have the benefit fully phased out at $97,500 of family net income and a family with two children would have it phased out at $114,500 of family net income.
The benefit takes effect Oct. 1, 2020. It will be administered alongside the Canada Child Benefit. Parents who are already registered for the Early Childhood Tax Benefit or the Canada Child Benefit before Sept. 30, 2020, will be automatically registered to receive the BC Child Opportunity Benefit.
Parents of newborns will be automatically registered for the BC Child Opportunity Benefit if the parent consents on the newborn’s birth certificate application for the BC Vital Statistics Agency to securely share information with the Canada Revenue Agency.
Parents who are not registered for the early childhood tax benefit or the Canada Child Benefit will need to apply to the CRA for the Canada Child Benefit to receive the BC Child Opportunity Benefit.
The new benefit is supposed to be listed in the province’s poverty reduction strategy, expected to be announced in Spring 2019. That strategy was not fully outlined in this budget.
In addition to helping younger children, James said the government also wants to help young adults starting out as well.
The government stated in the budget it will be eliminating interest charges on B.C. student loans. As of Tuesday (Feb. 19, 2019), interest will no longer accrue on new and existing loans provided through the British Columbia Student Loan program. Interest was previously charged at the prime rate. The government is investing $318 million in the 2018/19 fiscal year and over the fiscal plan period for this elimination. The average undergraduate borrower has $11,200 in B.C. student loan debt.
A Balanced Budget
The B.C. government has a $274 million surplus for 2019/20, a $287 million surplus for 2020/21 and a $585 million surplus for 2021/2022.
However, the government has listed that there are risks to the fiscal plan, including ICBC’s financial results for 2018/19, potential changes to federal government allocations for health and social transfers and cost-sharing agreements, impacts on provincial income taxes arising from federal government tax policy changes and increased demands for government services, and income assistance.
The government has included forecast allowances of $500 million in 2019/20, $300 million in 2020/21 and $300 million in 2021/22. There are also contingencies vote allocation of $750 million in 2019/20, $400 million per year in 2020/21 and 2021/22. The Budget 2019 outlook for B.C.’s real GDP growth is lower than the outlook provided by the Economic Forecast Council and the natural gas revenue forecast uses a price forecast lower than the average of private sector forecasts.
The budget reiterates the $1.2 billion loss for ICBC for 2018/19 and is projecting a $50 million loss for 2019/20. However, the 2020/21 plan has ICBC with a surplus $86 million followed by $148 surplus in 2021/22. The government expects the planned reforms will bring ICBC out of the red. Starting on April 1, 2019, there will be caps on soft-tissue injury rewards, an introduction of the Civil Resolution Tribunal, reducing the number of expert witnesses in a case. And on Sept. 1, 2019, there will be a restructuring of the rates.
Finance Minister Carole James said the budget is “balanced fiscally and balanced in its approach.”
“British Columbia is thriving. We have a balanced budget across the fiscal track. We are the only province with a triple AAA credit rating from all three major international rating agencies. But we will never have a truly prosperous province unless everyone in British Columbia can share in that prosperity.”
James added that the provincial government still has work to do fix ICBC’s financial mess, deal with real estate speculation and more.
“We are doing the heavy lifting to put B.C. back on track where people can see some hope on the horizon. We know the problems we face aren’t going to be fixed overnight.”
More on Budget 2019
- $3 billion over 25 years from provincial gaming revenue will be shared with B.C. First Nations to invest in their communities’ priorities. Every First Nation in the province will be eligible for between $250,000 and $2 million annually. For the first three years, the payments will total $297 million. First Nations can determine what to do with the funding, including putting it toward housing, infrastructure, housing, health and wellness or environmental protection.
- Fully eliminating MSP premiums on Jan. 1, 2020
- Increasing income and disability assistance rates by an additional $50 per month, which is a total increase of $150 per month or $1,900 per year since the NDP government’s first budget in 2016
- Investing $26 million for income and disability assistance enhancements to the B.C. Employment Assistance program
- $85 million for increasing support payments for foster parents, adoptive parents and extended family members caring for children. This includes a 75 per cent increase to support payments for the Extended Family Program
- $76 million for 200 new modular units, bringing the provincial total to 2,200 modular units for supportive housing
- Enhancing the BC Employment Assistance program by: increasing the maximum value of assets clients can have prior to receiving assistance, removing restrictions on vehicles a client can own to use for day-to-day transportation, supporting clients to leave assistance for short-term opportunities by simplifying the reapplication process, increasing crisis supplement for shelters and helping clients with security deposits. The $400 rental rebate promised by the NDP government is not in this budget but James said they are working with the Green caucus on developing it
- Providing funding to community organizations to operate rent banks by providing short-term loans with little to no interest to low-income tenants who can’t pay their rent due to a financial crisis
- $4.4 billion over three years to expand and upgrade hospitals, medical and diagnostic equipment and health information
- $105 million for cancer care services delivered by the BC Cancer Agency, including increasing the number of cancer-related surgeries, diagnostic imaging, PET and CT scans
- $74 million for mental health care, including prevention and early intervention for children, youth and young adults
- Increasing support by an additional $30 million, for a total of $608 million since the NDP budget update in 2017, to help tackle the overdose crisis. This will include expanding naloxone kit access and funding pilot programs to meet a demand for paramedics in rural and remote areas of B.C.
- $42 million for the Fair PharmaCare program to go to coverage for more drug options
- $550 million in additional support for public education, including $58 million over three years for the Classroom Enhancement Fund
- $20 billion in capital investments, primarily in health, transportation and education sectors
- $902 million over three years for CleanBC to help B.C. achieve its target of lowering carbon pollution by 18.9 megatonnes by 2030. This includes $354 million in operating funding, $299 million for programs in development and $26 million in capital investments. There is more than $679 million in funding for the plan to reduce carbon pollution and promote clean energy. There is also $299 million in contingencies. The investment is being supplemented by enhancements to the Climate Action Tax Credits. Of the operating funding, $107 million is going toward helping B.C. switch to zero-emission vehicles and other alternative transportation. For example, $20 million will go toward creating new public fast-charging and hydrogen fueling stations.
- $10 million for diversifying forest tenures and manufacturing, increasing timber processing in B.C. and supporting collaboration with Indigenous governments and other stakeholders
- $18 million to continue making Adult Basic Education and English Language Learning free
- $21 million to expanded BC Transit and handyDART
- $39 million for bridges and roads and $4 million to increase inspection station hours and targeted enforcement for commercial vehicles
- $9 million to modernize the taxi industry and enable ride-hailing
- $15 million for the BC Arts Council
- $20 million for an independent oversight body in the mining sector
- $14 million to update B.C.’s employment standard for protections and enforcement
- $50 million to expand high-speed internet in rural and remote communities