Tax memo: 2010 British Columbia Budget
On Tuesday, March 2, 2010, the British Columbia Minister of Finance, the Honourable Colin Hansen, introduced the province’s 2010 budget. According to the Minister, the province’s economy shows signs of recovery from the unprecedented global economic turmoil that has affected it since 2008. As a result, the B.C. government is projecting a steady reduction in the fiscal deficit in 2010 and beyond, with a return to a balanced budget by the 2013/14 fiscal year. The budget has an estimated deficit of $1,715 million for 2010/11, $945 million for 2011/12, and $145 million in 2012/2013. These projections are based on economic growth forecasts of 2.2% for 2010, 2.3% for 2011, and 2.8% for the following three years.
The budget refers to the B.C. government’s continued commitment to its accelerated infrastructure spending plan. According to the Minister, since October 2008, $5.3 billion has been committed to these investments, which represents an increase of $1.9 billion since the September 2009 Budget Update. The province now expects to spend $20.7 billion on capital projects over the next three years, with $1.5 billion of that amount coming from federal government contributions.
The budget forecasts government revenue of $39.2 billion for 2010/11, $41.0 billion for 2011/12 and $42.8 billion for 2012/13, an average annual increase of 4.9% over the next three years. The budget includes contingencies of $450 million for each year to cushion the fiscal plan from unexpected events. In addition, the projected deficits include forecast allowances of $300 million in 2010/11 and 2011/12, and $400 million in 2012/13.
Total government expenditures are forecast to increase by an average of 2.3% annually over the next three years. Taxpayer-supported debt-to-GDP ratio is forecast to be 17.2% in 2010/11 and 17.9% in 2011/12.
The budget does not alter income tax rates beyond those previously announced, but it does introduce some new income tax credits and make changes to some existing income tax credits. It also modifies the application of certain other taxes in British Columbia. This Tax memo discusses these and other tax initiatives, many of which were announced previously.
The budget reiterates measures introduced in British Columbia’s September Budget Update 2009, delivered on September 1, 2009. These changes are discussed in our Tax memo, “British Columbia Budget Update – September 1, 2009: Tax Highlights.”
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Tax memo: 2010 British Columbia Budget (266 KB) |
