B.C. BUDGET ANALYSIS 2019/20 - A prudent plan to strengthen the economy while investing in environmental sustainability and critical public services
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B.C. BUDGET ANALYSIS 2019/20
A prudent plan to strengthen the economy while investing
in environmental sustainability and critical public services
Overview
This week, the BC NDP delivered its second full Budget 2019 reveals that the provincial economy
budget and fiscal plan. After 16 years of austerity remains strong under the BC NDP’s continued
and retrenchment under the BC Liberals, the current leadership, showing an upward revision to the
government continues its steps toward rebuilding growth estimate for real GDP in 2019 to 2.4 per
core public services through this new budget, cent from 1.8 per cent. Despite some moderation in
expanding upon the important pathways, strategies housing activity and consumer spending throughout
and programs it introduced in last year’s fiscal plan 2018, exports performed well, growth in business
and in the initial Budget 2017 Update before it. investment was positive at 5.8 per cent, and unem-
ployment remained the lowest in Canada at 4.7 per
Budget 2019 stays the course on milestone programs
cent (2018 average).
unveiled in 2018—namely, housing and child care—
delivering scheduled funding increases this year, But the government recognizes that our economy is
along with notable (though restrained) additions and still not doing enough for many British Columbians,
enhancements in select areas. It also continues to and so this budget takes additional steps toward
supply much-needed, though incremental, funding implementing core programs, social investments, and
and resource improvements in other areas of the service improvements that are needed for creating a
public service. This balanced budget continues to more people-centred, inclusive and affordable B.C.
spend on infrastructure, advances affordability and
Some of the highlights include:
tax fairness, and protects the government’s fiscal
position for long-term, sustainable public investment. • Introducing a significant new program to support
families with the B.C. Child Opportunity Benefit;
The province can achieve • Continuing the implementation of a universal,
affordable child care system, including modest
nation-leading economic additional funding throughout the fiscal plan;
growth while continuing to
• Completing the full elimination of MSP premi-
ums by 2020;
close the gap on underfunded • Establishing a ground-breaking revenue-sharing
services and supports to
agreement with B.C. First Nations;
• Moving forward with investments in govern-
families and workers. ment’s new CleanBC climate plan;
• Extending new and additional business tax
deductions to boost competitiveness;
In a commitment to British Columbians (and a clear
• Eliminating interest on British Columbia student
message to the opposition), Finance Minister Carole
loans;
James stated that, “[p]eople were told they had to
• Introducing a modest increase to the income and
choose between a strong economy or investments
disability assistance rates;
in people. But the truth is, we can and must have
• Continuing the implementation of a 30-point
both.” The new budget gives further evidence that,
plan to address housing affordability and harmful
indeed, the province can achieve nation-leading
market speculation, including modest additional
economic growth while continuing to close the gap
funding throughout the fiscal plan;
on underfunded services and supports to families
• Removing barriers to improve access to income,
and workers. These goals are not mutually exclusive.
disability and employment assistance programs;• Increasing support payments for foster parents, beginning in October 2020, into the new B.C. Child
adoptive parents, and extended family members Opportunity Benefit will significantly increase the
caring for children; existing one-child benefit under ETCB from $660 to
• Investing in respite services for parents who $1,600 annually (+142%), and to $2,600 and $3,400
provide care for children with disabilities; for eligible two- and three-child families respectively.
• Providing additional funds over three years for
The annual benefit is available to eligible families
B.C. bridge and road maintenance;
until their child reaches adulthood (18 years of
• Making a substantial investment to fund an
age), meaning that a one-child family could receive
independent oversight body in the mining sector;
a maximum lifetime benefit of up to $28,800, or
• Increasing funding for wildfire management and
$48,000 for a family with two children, and $64,400
prevention;
for those with three. All families earning up to
• Providing an additional expansion to funding
$97,487 with one child under 18 and all families
and resources for the employment standards
earning up to $114,487 with two children under
branch to improve fairness for vulnerable
18 will receive the benefit. These large combined
workers;
household income thresholds mean that the program
• Supporting Indigenous reconciliation work;
will apply broadly across a large proportion of B.C.
• Improving mental health care with initiatives
families—from middle-class British Columbians to
focused on prevention and early intervention for
those living in poverty—thereby allowing many to
children, youth and young adults; and
receive at least some level of benefit.
• Making significant capital investments in the
health, transportation and education sectors. While the government’s expectation for how many
families this will realistically lift above the poverty
Budget 2019 extends a wide line is perhaps overstated, it is accurate to say that
the new benefit, combined with the elimination
number of programs and of MSP premiums, will amount to a significant
investments that will make
reduction in the overall tax burden for lower- and
middle-income families with children.
life a little easier for British The BC Government and Service Employees’ Union
Columbians. (BCGEU) has reviewed the provincial budget, minis-
try by ministry, to help understand how government’s
choices in the fiscal year of 2019/20 will affect the
Budget 2019 extends a wide number of programs
work our members do and the services our province
and investments that will make life a little easier
relies on. In the review, we identify areas where
for British Columbians, especially for those that
progress has been made and where more is still
are more vulnerable socially and economically.
needed.
But despite the focus on poverty and affordability,
a provincial poverty reduction strategy is notably
absent within the budget and fiscal plan (although
Revenue
this is expected by early spring, along with additional The budget projects that total revenue for the
dedicated funding). coming year (2019/20) will grow substantially above
the updated forecast for 2018/19, by as much as
In the meantime, what Budget 2019 does present
$2.4 billion (+4.3%). This is followed by expected
to British Columbians is a robust and far-reaching
year-over-year increases of $991 million (+1.7%) in
benefit program that will support low- and mid-
2020/21 and $2.4 billion (+4.0%) in 2021/22.
dle-income families for the full duration of their
children’s dependent years. By converting and Over the three years of the fiscal plan, total expected
expanding the Early Childhood Tax Benefit (ECTB), revenue growth will average 3.4 per cent per year
BCGEU BUDGET ANALYSIS 2019/20 2approaching 2021/22, which is just slightly above from last year’s original estimate for 2019/20. It is
the average Ministry of Finance forecast for GDP now estimated to run flat at $1.9 billion annually
(nominal) growth over the same period. This reflects through 2021/22.
government revenue capture that is on pace with
These changes are starting to reveal the cumulative
expansion in the provincial economy. It edges up
effect of federal and provincial policies aimed at
total revenue as a proportion of GDP to 19.1 per
cooling a highly speculative and overheated resi-
cent for the upcoming fiscal year—slightly above the
dential real estate market. Slower market growth and
ratio exercised under the previous Liberal govern-
fewer transactions can be expected to further weaken
ment, as well as last year’s budget.
property tax and transfer revenues over the duration
The NDP government’s fiscal planning demonstrates of the fiscal plan—perhaps impacting demand in the
similar prudence and responsibility, but continues B.C. retail sector and its associated revenues should
to generate revenue that is slightly higher as a total there be wider effect on consumer confidence.
proportion of GDP, and therefore more in line with
In comparison to the NDP’s first full budget in
our economy’s “ability to pay.” This has allowed the
February 2018, Budget 2019 is notable for its
current government greater fiscal capacity than under
absence of new tax measures (apart from a sched-
the Liberals. Over time, that government permitted
uled $5 per tonne increase to the provincial carbon
critical funding shortages within core programs and
tax). Nevertheless, government has booked a deceiv-
services, along with significant impacts for workers in
ingly large amount of fiscal prudence for 2019/20
the public sector, and for families and communities—
totaling roughly $2.1 billion. This figure comprises
and especially for the province’s most vulnerable.
$274 million in surplus revenue, a $750 million con-
In 2019/20, total direct tax revenue is projected to tingency vote, $500 million in forecast allowance,
increase by $1.1 billion (+3.4%). While this is a and $553 million in additional contingencies under
more moderate expansion in revenue than the year the Sustainable Services Negotiating Mandate.
before (a result due primarily to the additional tax
Although these allowances reflect an outsized
measures introduced in that budget), it continues
amount of unused fiscal capacity, it is likely that the
to help offset an ongoing and concerning decline
government is allowing for additional funding for a
in natural resource rents, royalties, and other fees,
promised but yet-to-be-released poverty reduction
which are down a further -$345 million (-11.7%) this
strategy. There may also be additional liabilities
year. This is expected to worsen over the course of
ahead with respect to writing down deficits and
the three-year plan.
deferral account balances at both ICBC and BC
The largest source of growth in provincial tax reve- Hydro.
nue is from personal incomes, which is expected to
Overall, this balanced budget reveals a favourable
deliver $1.2 billion (+12.4%) more than last year’s
and conscientious revenue position, reflects contin-
original estimate for 2019/20. This shows a continu-
ued prudence and fiscal responsibility on the part of
ation of larger-than-expected receipts from personal
the NDP government. Moreover, it further demon-
earnings (a possible reflection of relatively strong
strates that the BC Liberals do not possess a monop-
labour market performance).
oly on sound economic and fiscal management.
Other modest revenue improvements are found in Solid macroeconomic growth can be maintained in
continuing retail sector performance (and associated this province while also translating a fair share of our
returns on sales tax), scheduled rate increase to the prosperity into financing for services and programs
BC Carbon Tax, and a moderate bump in property that benefit all British Columbians.
tax revenues. However, the fiscal outlook in Budget
These choices will continue to serve the government
2019 is notable for a downward adjustment in
and province well as ongoing investments in afford-
projected revenue from the provincial property
ability, child care, housing and poverty reduction are
transfer tax, which will slide -$345 million (-11.7%)
made in the months (and fiscal years) ahead.
BCGEU BUDGET ANALYSIS 2019/20 3Public service
In 2018/19, 1,459 (+5.0%) new FTEs were added Columbians who upgrade their education and
to the public service, bringing the total to 30,750. skills. The additional funding will increase the
Budget 2019 projects a further increase in staff total annual budget for these programs to $24
utilization by 600 FTEs across core government million annually.
ministries. This will bring the total to 31,350 FTEs in • Expanding Access to Health Training Programs:
2019/20. Budget 2019 provides $5 million over three
years to train and graduate more healthcare
As government notes in the budget and fiscal plan:
providers through public post-secondary insti-
This [growth] is due mainly to increased staffing tutions in urban, rural, remote and under-served
requirements to implement CleanBC programming, communities.
Employment Standards and Temporary Foreign • Expanding Access to Technology Training
Worker Registry Transformation initiatives, mental Programs: : An additional $5 million in annual
health services, coast forest sector revitalization, funding will be provided for post-secondary
and independent oversight of mining and other institution grants in 2021/22 to support tech-
professions. The projected increase in FTEs is also nology programming, increasing total annual
due in part to continued implementation of road funding for this program to $41 million.
safety programs, the Civil Resolution Tribunal,
Capital spending
cannabis legalization, commercial vehicle and
safety enforcement, and staff to support reconcilia- Budget 2019 includes $3.3 billion in total capital
tion with First Nations. spending over the next three years by post-secondary
institutions throughout the province. Major capital
These funding- and program-related changes to
projects (over $50 million per project) listed in the
staffing are discussed in greater detail where possible
service plan include new laboratories and instruc-
within the ministry and agency summaries that
tional buildings at UBC, SFU, BCIT and Camosun
follow.
College, as well as $201 million to build new
student housing at the University of Victoria and $37
Ministries million to acquire and renovate student housing at
Thompson Rivers University. Notable capital projects
Ministry of Advanced Education, Skills below $50 million per project include renewal and
and Training (MAEST) expansion of trades training facilities at North Island
Budget 2019 adds $117.9 million to the ministry’s College, Selkirk College and the College of New
operating budget in 2019/20, bringing it to a total Caledonia.
of $2.3 billion (+5.3%). The majority of this new
funding is allocated for post-secondary educational Elimination of interest on student loans
institutions and organization, with that budget line
Perhaps the most significant announcement impact-
rising by $115.5 million (+5.7%). This funding will
ing advanced education and training in Budget
help increase the number of student spaces in public
2019 is the elimination of interest on the provincial
post-secondary and training institutions by almost
component of student loans, although this actually
2,800 seats in 2019/20.
falls under the purview of the Ministry of Finance
Modest but important new spending announced in and is not recorded under MAEST budget.
Budget 2019 includes:
This measure came into effect immediately, applies
• Adult Basic Education and English Language to both existing and new loans, and is expected to
Learning: Budget 2019 provides an additional cost the government $318 million over four years.
$18 million over three years to support British
BCGEU BUDGET ANALYSIS 2019/20 4Budget documents estimate the typical undergradu- Ministry of Agriculture
ate borrower will save about $2,300 in interest over
Budget 2019 adds $17 million over three years to
a 10-year repayment period
the Ministry of Agriculture’s budget. Focused on
This elimination of student loan interest was a the agriculture science and policy and business
specific recommendation in the BCGEU’s most management budget lines, the plan includes a $4.5
recent pre-budget submission to the Select Standing million (+4.8%) increase to $98 million in 2019/20,
Committee on Finance, and we commend the and then $99 million (+1%) in the next two years of
government on moving forward with this measure the budget. This new funding has been provided for
to improve affordability and access to education for increased programming for “Grow BC, Feed BC, Buy
British Columbians. BC” and cannabis legalization implementation.
Agriculture is a key contributor to rural economic
Industry Training Authority (ITA)
development by supporting province-wide job
2018 saw a number of positive changes at the creation. Removing barriers for those seeking to
Industry Training Authority, including the appoint- enter the industry, revitalizing the Agricultural Land
ment of a new board of directors with increased Reserve (ALR) and the Agricultural Land Commission
labour representation and the installation of a (ALC), fostering innovation, encouraging consumers
new CEO. The ITA was involved in the opening of to buy local products and the creation of a “Food
seven new trades training facilities in 2018 and the Hub Network” to better support food processing
provision of $3 million for updated equipment at throughout B.C. are among the initiatives outlined
B.C. post-secondary institutions. The ITA also signed in the ministry’s service plan. The ministry will also
MOUs regarding training with a number of B.C. encourage large B.C.-based purchasers including
Indigenous communities. hospitals and post-secondary institutions to increase
their use of B.C. grown and processed foods.
Budget 2019 builds on this positive trajectory by
providing an additional $3 million over three years Funding for the Agricultural Land Commission
to enable the ITA to increase “support for appren- (ALC), the Farm Industry Review Board (FIRB) and
tices, employers and Indigenous communities to executive and support services has been unfrozen
engage with and navigate through the trades training for the Budget 2019 plan. The ALC budget will rise
system.” The new funding will also support the devel- to $4.9 million (+6.3%) in 2019/20, and remain
opment of a “Performance Management Framework,” approximately the same over the next two budgets.
that will help evaluate ITA initiatives and report on FIRB funding for 2019/20 is $1.3 million (+9.3%)
progress toward inclusion of Indigenous peoples, and the budget for executive and support services
women and equity-seeking groups in skilled trades. will increase by 2 per cent, with both budget lines
remaining at approximately 2019/20 levels over the
While this is a positive development and lines up
next two budgets. While total salaries and benefits
well with the BCGEU’s pre-budget recommenda-
are budgeted to rise to $33.4 million (+5.1%) in
tions, the ITA service plan states there is no change
2019/20, a greater investment will be needed to
in investment in training seats for adults or youth in
rebuild staff capacity and expertise within the
the coming year. The BCGEU has called for invest-
Ministry of Agriculture.
ment in new apprenticeship training spaces and
trades instruction capacity to meet growing industry
demand and suggests that the government consider Ministry of Children and Family
including such measures in the launch of its Poverty Development (MCFD)
Reduction Strategy later this year. Total expenditures in MCFD for 2019/20 will reach
$2.06 billion—increasing a further $272.3 million
(+15.2%) over last year. The budget will increase
BCGEU BUDGET ANALYSIS 2019/20 5again to $2.18 billion (+5.8%) in 2020/21, staying at will also see a $10.5 million (+10.6%) increase in
approximately that level through 2021/22. 2019/20, and an additional $3.5 million (+3.2%) in
2020/21. These increases to CYSN and CYMH rep-
The majority of the 2019/20 increase is due to
resent critical spending to help address waitlists and
expected growth in child care expenditures that are
continued staffing and caseload pressures faced by
scheduled within the ongoing implementation B.C.’s
clinicians and specialists in these important service
affordable child care program. To this end, spending
areas, as well as reflect the ongoing and expanding
within early childhood development and child care
public commitments made by government in the
services will increase a further $181.1 million to
area of youth mental health.
$624.8 million total in 2019/20—a 41 per cent
increase over the previous year in this budget line. In addition to the incremental improvements and
investments in child welfare services noted above,
This investment meets the previously scheduled bud-
Budget 2019 presents a further $6 million annually
get growth for child care outlined in last year’s fiscal
to expand the respite benefit by 10 per cent for
plan, plus an additional $9 million over and above
parents who care for children with special needs.
government’s existing commitments in this area for
Also, from within the cumulative funding increases
2019/20. The current fiscal plan will also repeat this
noted above, $85 million over three years will go
$9 million boost annually through 2021/22 to further
toward increasing support payments for foster par-
support the Child Care Fee Reduction Initiative and
ents, adoptive parents, and extended family members
associated Child Care Operating Fund program.
caring for children—including a 75 per cent increase
Total expenditures in MCFD’s budget line for child to payments for the Extended Family Program (a key
care will increase again in 2020/21 to $733.2 million recommendation to government from Indigenous
(+17.3) where it will top out and remain unchanged communities and Grand Chief Ed John).
through 2021/22. Both the BCGEU and its key allies
These are comparatively small financial outlays for
in the fight for high-quality universal and affordable
government, but significant measures for addressing
child care (including $10aDay), continue to applaud
the major challenges faced by parents and caregiv-
and support these monumental investments by
ers, and for improving overall outcomes in adoptions
government. To date, these measures have helped
and permanency. They also reflect the input and
the families of more than 52,000 children benefit
direct feedback received from BCGEU members who
from lower fees and to access better facilities; at the
work on the front lines to deliver child, youth and
same time, Early Childhood Educators will receive
family services in B.C.
their first publicly-funded wage increase in nearly 20
years—along with increased bursaries and education Budget 2019 indicates government’s continuing
supports. reinvestment in critical child and family services, as
well as new hiring to increase front-line staff. Despite
While the above measures account for the bulk of
these efforts, including the restoration and expansion
new ministry spending in 2019/20, expenditures
of desperately needed funding, the BCGEU remains
in child safety, family support and children in care
concerned about reports of persistent workload
services also increase by $41.8 million in 2019/20
issues, negative morale and discouragement among
(+6.5%), and by a further $8 million (+1.2%) in each
workers in the ministry. The union will continue
of the two remaining years of the fiscal plan.
its work to address unresolved recruitment and
Expenditures in services for children and youth with retention issues in the ministry, and to ensure that
special needs (CYSN) will increase by a relatively improved resources lead to meaningful improve-
substantial $25.2 million (+7.0%) in 2019/20, ments for vulnerable children, families, communities
leveling out at $387.6 million total through 2021/22. and the workers who serve them.
Child and youth mental health services (CYMH)
BCGEU BUDGET ANALYSIS 2019/20 6BCGEU’s ongoing advocacy work under the union’s Other new spending includes the development of a
Choose Children campaign has resulted in many new First Nations history curriculum and developing
important successes, but further commitments are full-course offerings in Indigenous languages.
needed from government to improve working condi- The budget also provides resources for expanding
tions for front-line staff. anti-bullying programs and providing resources to
support mental health and wellness, sexual orienta-
Ministry of Citizens’ Services tion and gender identity.
Overall operating expenses for the ministry for Capital spending in the public school system will
2019/20 are $551.6 million, up 3.6 per cent from also be boosted, with $2.7 billion set aside over
last year. Funding for services to citizens and busi- three years to maintain, replace, renovate or expand
nesses will increase to $32.5 million (+16%), with K-12 facilities. Since September 2017, B.C. has
smaller increases in other ministry budget lines. approved 24 seismic upgrade projects, with one-
third of all projects completed or underway.
Capital expenditures under the ministry for 2019/20,
are up by 33 per cent to $417.2 million, before
dropping back to $310.7 million in 2020/21 and Ministry of Energy, Mines and
$274.7 million in 2021/22. Some of this capital Petroleum Resources
spending is allocated to energy efficiency upgrades The ministry will see a major one year infusion of
and emissions reduction projects in government additional funding in this fiscal year, to fund the gov-
owned and leased buildings as part of the CleanBC ernment’s Electricity and Alternative Energy program,
plan. The Ministry of Citizens’ Services is allocated as part of the CleanBC initiative. Overall operational
$14 million in operating funding and almost $26 funding will increase by $120 million (+200%) in
million in capital funding to support these projects. 2019/20. Annual operating funds will settle out at
just over a third more than the 2018/2019 level, at
The ministry is also responsible for the relocation
$93.8 million by 2021/22.
of the Maples Adolescent Treatment Centre to the
Riverview lands. Budget 2019 shows that the esti- Annual GHG reductions from infrastructure improve-
mated cost of this project has shrunk by $11 million, ments under the royalty credit programs is forecast to
and is now expected to total $64 million. more than double in four years, from 80,000 tonnes
in 2018/19 to 163,000 tonnes reduced in 2021/22.
Ministry of Education The number of light-duty Zero Emission Vehicles
(ZEV) registered in B.C. is forecast to rise from
Budget 2019 shows a $228.1 million (+3.6%)
12,500 in 2018 to 65,100 in 2022.
increase in operating expenditures, bringing the
Ministry of Education’s total operating budget to Improvements to compliance and enforcement will
$6.57 billion for 2019/20. Overall spending will see the establishment of a Major Mines office to
remain at a similar level over the next two budget bring technical specialists and project management
cycles. Most of this increase is allocated to public together to improve co-ordination and review of
school operations. projects. The number of yearly mine inspections is
also forecast to increase from a baseline of 775 from
The budget commits $550 million of new funding
2009-2013, to 1,350 annually from 2019-2021.
over three years to hire new teachers and special
education assistants and improve classrooms.
BC Oil and Gas Commission
However, the BC Teachers’ Federation cautions the
year-over-year increases will fall short of what’s Overall operational funding for the BC Oil and Gas
needed to meet immediate needs like addressing the Commission will remain fairly constant over the next
ongoing teacher shortage. three years, increasing by $7.3 million (+13.8%),
BCGEU BUDGET ANALYSIS 2019/20 7to $60 million by 2021/22. The 2018/19 deficit the government’s overall commitments grouped
of $12.3 million in the Orphan Site Reserve Fund under the plan to $902 million, with only a portion
(OSRF – for environmental remediation of orphan of that amount falling directly under the budget of
wells) will be eliminated going forward, through the Ministry of Environment and Climate Change
increased fees charged to oil and gas operators. Strategy.
Annual funding for this program will be increased by
Central to CleanBC are incentives and tax credits for
$7 million per year, to $15.2 million annually.
people and businesses to reduce their carbon pollu-
A key section of the service plan outlining forecast tion. Some of the highlights for individuals include
risks, however, states that a major energy company a $6,000 incentive to switch to a zero-emission
entered receivership in 2018, leaving potential vehicle, up to $2,000 to replace fossil fuel heating
orphan well designations in a “range between 300 to systems and $1,000 to upgrade windows and doors
500 wells at an estimated liability to the Commission to improve insulation.
of $40 - $90 million” and notes that “there is no
The major implication for the budget of the Ministry
provision built into the financial plan” for this
of Environment and Climate Change Strategy is the
eventuality.
CleanBC Industry plan, representing an increase of
The service plan also forecasts an increase in permits $168 million over three years. In 2019/20, the plan
issued in environmentally sensitive areas, from 0.6 earmarks $55 million in new program funding (see
per cent in 2017/18 to under 2 per cent by 2021/22. above) to provide incentives to industry including
The percentage of available freshwater withdrawn pulp and paper mills, natural gas operations and
for oil and gas activities is also forecast to increase, refineries and mines to reduce their greenhouse gas
from 1.5 per cent in 2017/18, to under 5 per cent by emissions.
2021/22.
A number of small increases to the budget will
improve monitoring and oversight capacity. A
Ministry of Environment and Climate new office of the Superintendent of Professional
Change Strategy Governance will be established with an investment
The ministry’s 2019/20 budget adds $64 million of $2 million over three years as the next step in
(+35.7%) over 2018/19 - from $179 million to $243 implementing long-needed reforms in the profes-
million. This increase is largely due to $55 million sional reliance model and improving transparency
for the CleanBC plan for industry and $3 million and oversight in the natural resource sector. The
over three years to support implementation and BCGEU recommended these changes in multiple
monitoring of the overall plan. official submissions to government.
CleanBC is a key plank of Budget 2019, and groups Additionally, there is a small increase to improve and
together a series of initiatives spread across various expand the office of Environmental Assessment - up
government ministries and agencies aimed at to $14 million (+27%) in 2019/20 from $11 million
“reducing climate pollution by investing in cleaner in 2018/19, with increased staffing costs associated
transportation, energy efficient homes and buildings, with a higher number of assessments carried out
clean energy strategies with Indigenous and remote with an amplified toolkit for engaging community,
communities, waste diversion and cleaner industry.” building partnerships with Indigenous communities
and improving compliance and enforcement.
Cumulatively, Budget 2019 presents more than $679
million over the fiscal plan for CleanBC initiatives Funding for environmental sustainability and
disbursed throughout multiple ministries, agencies Conservation Officer Service will remain the same.
and programs. This investment is supplemented Disappointingly, the BC Parks budget remains at
by enhancements to the Climate Action Tax Credit $41 million for 2019/20 and no growth in the Park
totalling $223 million over three years, bringing Enhancement Fund. The BCGEU repeatedly called
BCGEU BUDGET ANALYSIS 2019/20 8on government to increase BC Parks’ annual budget through the statutory spending authority provided for
to $100 million in order to expand the system, invest under the Wildfire Act.
in conservation and protection, and improve and
Other areas of investment include a $10 million
expand recreational services as well as opportunities
expansion in the budget for Regional Operations
for parks users. While some of this budget would
in 2019/20, largely due to a growth in staffing in
require new investments, we believe a significant
regional offices. Resource stewardship expenditures
portion of the increased costs could be recovered
are also increasing, from $101 million in 2018/19
in the form of economic benefits, increased tax
to $104 million (+3%) in 2019/20 and will grow
revenues, increased usage volume and savings from
to $111 million (+6.7%) in 2020/21. Finally, the
transitioning front-country parks operations back
Coast Forest Revitalization program will receive $10
“in-house” with a direct government, rather than
million over three years to support several initiatives,
contracted, delivery model.
including diversifying forest tenures, increasing
timber processing and engaging with stakeholders.
Ministry of Forests, Lands, Natural
Resource Operations and Rural On the revenue side, Budget 2019 paints a bleak
Development picture of a changing forest industry. Forestry
revenue is expected to fall substantially in 2019/20
The 2019/20 budget for the Ministry of Forests,
and continue to trend downward, due largely to
Lands, Natural Resource Operations and Rural
decreased lumber prices. Revenue from forestry is
Development (FLNRORD) is $823 million, an
projected to drop from $1.38 billion in 2018-19 to
increase of about $88 million (+12%) over 2018/19.
$1.15 billion in 2019-20 and to $1 billion by 2021
The operating budget will drop to $808 million
as harvest numbers fall.
in 2020/21 before rising again to $819 million in
2021/22, due largely to fluctuations in the B.C. Moving forward, policy initiatives currently under-
Timber Sales Account. way to reform forest practices should be focused on
sustainability of both the forest ecosystems and the
Wildfire management is the major shift in the
social and economic systems that depend on them.
FLNRORD budget, up from $63 million in 2018 to
At the same time, it is important to make strategic
$101 million (+60%) in 2019/20, and continuing at
public investments in transition measures to ensure
that level going forward. Fire preparedness has also
that workers and their communities that have been
been expanded from $35 million up to $46 million
dependent on a robust forest industry are not left
(+31%), an important step forward in increasing
behind.
staffing levels at the BC Wildfire services. However,
more investment is still needed to build the ministry’s
capacity for effective fire prevention, long-term Ministry of Health
planning and staffing to manage wildfire seasons. Budget 2019 expands the Ministry of Health’s budget
significantly from the previous year. A large budget-
These increased allocations still come nowhere
ary increase of $1.09 billion (+5.52%) outpaces the
near the true costs of recent wildfire seasons. Fire
2018/19 estimates for this year. The majority of new
management costs for the 2018 season were $551
spending is associated with the increased budget for
million, and emergency program costs associated
Regional Services of $836 million (+6.25%), with a
with flooding and wildfires were $308 million.
smaller but significant increase of $173 million to
Together, combatting floods and wildfires in 2018
Medical Services Plan (3.61%), as well as an addi-
cost the province $859 million, which is higher than
tional $970,000 to Pharmacare (+2.1%). The total
the combined operating budgets of the ministries
ministry operating budget will rise to an estimated
of environment, mental health and addictions, and
$14.7 billion (+3.6%) in 2020/21, then to $15.2
Indigenous relations and reconciliation. Costs above
billion (+3.2%) in 2021/22.
the base amount in the ministries’ budget are funded
BCGEU BUDGET ANALYSIS 2019/20 9This new investment includes supports for the BC Ministry of Indigenous Relations and
Children’s and Women’s hospitals to provide services Reconciliation
to women, children, newborns and families, and will
Budget 2019 allocates $108 million to the Ministry
also support the BC Cancer Agency and provide for
of Indigenous Relations and Reconciliation, up $7
new drugs to be covered under PharmaCare.
million (+6.9%) from 2018/19. The budget is esti-
In terms of capital spending, Budget 2019 includes mated to be $107 million for each of the following
$2.1 billion dollars in funding for three major new two years.
health care facilities over the next seven years.
The most significant Budget 2019 initiative with
These three facilities join 14 other capital projects
implications for Indigenous communities was the
being accounted for province wide, with six will
announcement of revenue sharing from gaming, with
being at or past completion dates in the 2019/20
payments estimated at $297 million over three years
period. Three of these ongoing 17 projects have been
and $3 billion over the next 25 years. This amounts
delayed slightly, with the Children’s and Women’s
to seven per cent of total B.C. government gaming
Hospital, Peace Arch Hospital and the Centre for
revenue, and comes out of longstanding discussions
Mental Health and Addiction having operational
between the province and First Nations about reve-
dates being pushed back one year into 2020, 2021,
nue sharing.
and 2020 respectively.
The First Nations Gaming Commission is establishing
Two notable heath sector IT projects have been the
a new partnership to manage the funding, which will
subject of recent provincial reviews. The review into
be overseen by a First Nations-appointed board of
iHealth has been completed and the review into
directors. Fifty per cent of the fund will be divided
the Clinical and Systems Transformation Project is
equally among B.C.’s First Nations. The rest will be
ongoing. The clinical and Systems Transformation
distributed based on a formula involving population,
Project Operating cost is expected to be significantly
size and geographic remoteness. The funding will
over-budget over the life of the project. Meanwhile
see annual allocations ranging from $250,000 to $2
the iHealth project for Vancouver Island Health
million per First Nation. How these dollars are to
Authority will not be completed in the full scope as
be spent is up to each First Nation, with the budget
set out and will be significantly overbudget. These
documents noting that the funding will allow First
cost overruns and the associated spending are not
Nations “to invest in their community priorities rang-
incorporated into forecasts in Budget 2019.
ing from health and wellness, housing, infrastructure,
Primary Care centres are opening as scheduled, training, environmental protection and economic
with 15 centres forecast to have opened in fiscal development.”
year 2018/19 rising to 25 in the following year. The
Many B.C. First Nations representatives say the
only metric in which the province is missing targets
funding is welcome but long overdue, noting that
is in addressing overtime hours worked by nurses
the previous BC Liberal governments failed to deliver
and allied professionals. This indicates that further
on revenue sharing commitments, despite years of
funding is needed to increase staffing levels. Hiring
negotiations.
additional staff is the most effective solution to
reducing the burden of overtime worked by front-line Other budget initiatives with important implications
staff in health care. for Indigenous peoples include:
Overall the government’s budget for health care, and • More funding for Indigenous extended family
their key indicators for performance are consistent caregivers by increasing support payments for the
with the stated support for continued investment in a Extended Family Program and for foster parents
broad and comprehensive strategy to improve health caring for children;
care for British Columbians.
BCGEU BUDGET ANALYSIS 2019/20 10• Funding for Legal Services Society to continue goals. The first is to provide supports for small
consultation and development of the Indigenous businesses to established themselves and grow, as
Justice Strategy; well as to provide incentives for them to stay in
• $18 million in CleanBC funding for Indigenous B.C.; this will start with the implementation of the
and remote communities, including $3 million recommendations from last year’s Small Business
for the BC Indigenous Clean Energy Initiative and Task Force, the Emerging Economy Task Force as well
$15 million for the Remote Community Clean as modernizing the Small Business Venture Capital
Energy Strategy; Tax Credit. The second goal is to assist businesses to
• $6 million in funding over three years for take advantage of international trade opportunities
the Ministry of Indigenous Relations and and attract investment in B.C. communities. The
Reconciliation for new staff to support continued third goal is to support Indigenous communities’
work on treaties and other agreements, environ- participation in the economy by hosting regional
mental stewardship initiatives and socio-eco- economic development sessions that will aim to
nomic development; connect those communities with existing programs
• Collaborating and consulting with Indigenous and opportunities.
governments in Coast Forest Revitalization
Other key investments in Budget 2019 will likely
Initiative;
assist the ministry’s mandate to support innovation
• $3 million over three years to enable the Industry
and job growth in rural and northern communities.
Training Authority to increase hands-on support
These include the Coast Forest Revitalization
for apprentices, employers and Indigenous com-
Initiative ($10 million), the Northern Capital and
munities to engage with and navigate through
Planning Grant ($100 million), high speed internet
the trades training system;
access expansion ($50 million), vocational training
• High-speed internet access will be expanded to
programs in the CleanBC program ($6 million), and
more than 200 rural and Indigenous communi-
2,900 science and tech spaces at post-secondary
ties through the Connecting BC program; and
institutions.
• Funding for “pursuing reconciliation with
Indigenous peoples” as part of the process of
implementing the revitalized Environmental Ministry of Justice and Attorney
Assessment Act. General
The previous year’s budget marked an important
These new measures and announcements are
change in direction for this ministry by offering a
authentic and meaningful steps taken by government
significant boost in funding in several critical areas,
in its commitment to the process of reconciliation.
including court services and the Legal Services
Society.
Ministry of Jobs, Trade and Technology
Budget 2019, by contrast, presents a total budget
Funding for the Ministry of Jobs, Trade and
lift for 2019/20 that is slightly higher than originally
Technology remains unchanged for 2019, at $97
scheduled, but still quite modest compared to
million, and is projected to remain the same going
2018 with only $21.3 million (+3.6%) in additional
forward. The ministry made progress on a number
funding for the ministry. These new resources will
of its priorities outlined in the 2018/19 service plan,
be spread relatively evenly across the ministry’s lead
including cross-ministerial collaborations to lower
business areas, including justice, prosecution, court
the small business tax rate, facilitate credential
and legal services, offering between $2 million to $3
upgrades for newcomers, and establish an Emerging
million increases to each line. The budget also notes
Economy Task Force.
that an additional $3 million is provided over the
The ministry service plan outlined for the next two fiscal plan to support compensation and retention
years identifies three new performance planning of court clerks, expand capacity at Justice Centres,
BCGEU BUDGET ANALYSIS 2019/20 11and modernize IT infrastructure at the Independent Total salaries and benefits are expected to rise to
Investigations Office. $19 million (+26.7%) in 2019/20 and remain at that
level going forward. Grants and contracted services
Total combined funding for the ministry will top
will decrease from $7.7 million last year to $6.8
out at $605.6 million in 2019/20, where it will stay
million (-11.7%) in 2019/20, then decrease to further
unchanged through the remaining two years of the
to about $4.8 million (-29.4%) in 2020/21 and
fiscal plan.
2021/22.
After highlighting for several years the pressing need
The main LSS announcement for Budget 2019 is a
to increase both court sheriffs and overall staffing in
plan to fund continuing consultation and develop-
court service to address significant procedural and
ment of the Indigenous Justice Strategy, and to pilot
administrative delays, the BCGEU was highly sup-
legal clinics in up to eight communities throughout
portive of the renewed investments made in 2018.
the province, in partnership with the Law Foundation
While these resources have permitted some notice-
of British Columbia.
able improvements in the day-to-day functioning of
B.C.’s court system, Budget 2019 fails to supply the The agency service plan notes that the LSS continues
additional resources needed to sustain and build to face challenges in recruitment and retention of
upon this progress in future years. trained staff, particularly in the Lower Mainland.
Other challenges noted in the service plan include::
Similarly, while the Finance Minister’s budget day
speech affirmed the significance and extent of money • Service improvements made in 2018/19 enable
laundering in the province (and the importance of LSS to better respond to the demand for family
taking firm action to investigate and address this law services, but the proportion of family appli-
criminality), the budget for the Ministry of Justice cants receiving a representation contract remains
and Attorney General indicates no additional or under 50 per cent.
dedicated resources for undertaking an official • Tariff rates remain unchanged. Lawyer dissatis-
public inquiry or similar process. Undertaking such faction with current rates is an ongoing concern
an initiative would help alleviate the disproportion- and creates a risk that LSS will not be able to
ate burden faced by B.C. casino employees who attract or retain highly skilled lawyers, resulting
work under sensitive and very stressful conditions to in service disruptions.
uphold their legal obligation to monitor and report
Priorities identified in the LSS service plan include:
suspicious criminal activity.
• Identifying ways to improve access to justice for
We hope that government will reconsider some of
Indigenous people;
these important priorities in the months ahead and
• Determining opportunities to better meet the
for future budgets.
legal needs of families with low incomes;
• Exploring and implementing digital delivery of
Legal Services Society (LSS)
services to improve access to justice; and
The total Legal Services Society operating budget for • Finding mechanisms that will support attraction
2019/20 is $91.9 million (-3.8%), down from $95.4 and retention of legal aid lawyers to sustain
million in 2018/19. The budget is forecast to remain delivery of legal aid services, particularly in rural
at $91.9 million over the next two budget cycles. areas.
Expenditures on lawyer fees are estimated to be In a submission to government in 2018, the BCGEU
$41.3 million for 2019/20, down 17 per cent called for improved delivery of legal aid through a
compared to last year. However, duty counsel fees primarily public model, and recommended a shift
are expected to rise to $9.6 million (+7.9%) and away from the present reliance on private bar refer-
remain at a similar level over the next two budgets. rals and the limited availability of publicly-funded
BCGEU BUDGET ANALYSIS 2019/20 12community legal aid resources. Expanding LSS Ministry of Labour
office locations and increasing staff at existing
Ministry of Labour funding will increase by $3.8
facilities will be an essential (and basic) condition
million (+30.2%) in 2019/20 to reach $16.4 million
for improvement within current system. We hope the
for the fiscal year. The budget will grow an additional
government is making initial steps in this direction
$1.1 million (+7.0%) in 2020/21 to a total of $17.6
through some measures included in Budget 2019,
million, remaining unchanged thereafter through
but it is too early to be sure.
2021/22.
BC Liquor Distribution Branch (LDB) From within the labour programs line, the
Employment Standards Branch (ESB) will see
Operating expenses for the BC Liquor Distribution
a substantial $4.3 million increase in 2019/20
Branch are projected to rise to $474.8 million
(+49.1%) and an additional $14 million combined
(+13.4%) in 2019/20, then $500.4 million (+5.4%)
over three years. In last year’s budget, the BCGEU
in 2020/21 and to $533.6 million (+6.6%) in
and its partners in the BC Employment Standards
2021/22. Employment expenses will rise at slightly
Coalition were greatly disappointed by a much lower
lower rate, to $245.7 million (+7.7%) in 2019/20,
than anticipated boost to ESB. Government has made
then $250 million (+1.7%) in 2020/21 and to $260.6
up for this in Budget 2019, pushing the branch’s
million (+4.2%) in 2021/22.
funding to $13 million annually—14.4% above the
The LDB continues to show net income growth, and $11.4 million that was budgeted 10 years ago prior
is predicted to continue to contribute more than to a series of harmful cuts introduced in 2009/10.
$1.1 billion annually to the province. Net income for
For two successive years, the BCGEU has called
2019/20 is projected at $1.12 billion (+1.7%) and is
for renewed and enhanced funding to ESB within
expected to rise steadily to $1.19 billion by 2021/22
its annual pre-budget consultation submissions to
(an 8.5% increase over 2018/19).
government. Now available, this additional funding
There is significant capital spending ($180 million will be used to support a “transformation” within the
over three years), indicating that government is branch to update employment standards that reflect
investing in the LDB for the long term, including the changing nature of work, and to better equip ESB
much-needed store updates, the creation of more with the staff and resources needed for fair, effective
physical BC Cannabis Stores, and technology and consistent enforcement.
upgrades. While the relocation of the Vancouver
Distribution Centre to Delta has been challenging Ministry of Mental Health and
logistically, it has not run over-budget. Addictions (MHA)
The service plan suggests the LDB may be encounter- The Ministry of Mental Health and Addictions
ing challenges in acquiring sufficient legal cannabis has essentially a status quo budget for fiscal year
to supply the B.C. retail market. Total revenue from 2019/20. The ministry will receive a nominal budget
cannabis is not mentioned in the LDB service plan, increase of $84,000 (+0.7%) from 2018/19 for a
but performance measures and targets note expec- total of just over $10 million dollars, and will stay
tations of $1,600 per square foot in 2018/19, rising at approximately the same level over the next two
to $1,655 in 2019/20, then $1,688 in 2020/21 and budget cycles.
$1,700 in 2021/22.
Most of the increase ($75,000) will go to policy
The BCGEU will continue to monitor for impacts of development, research, program monitoring and
the Business Technical Advisory Panel’s recommen- evaluation, partnerships with other organizations,
dations, as some of them may be implemented in and other activities related to mental health and
2019. addictions services.
BCGEU BUDGET ANALYSIS 2019/20 13Budget 2019 allocates $30 million over the next Local government focused initiatives announced
three fiscal years to tackle the overdose crisis, in the budget include the Northern Capital and
which is new investment in addition to the total Planning Grant, through which the province will
$578 million provided since Budget 2017 Update. provide $100 million to 26 local governments along
Funding is going towards 21 overdose prevention the LNG corridor and near Kitimat to help meet
sites and nine supervised consumption sites and will infrastructure needs. Though announced in Budget
help meet increased demand for paramedics in rural 2019, this funding appears to be tied to the 2018/19
and remote areas of B.C. budget year.
The ministry is continuing to increase access to Budget 2019 also provides $18 million in 2019/20
publicly funded Naloxone kits as per recommenda- for MAH to facilitate payments under the Peace River
tions that came from BCGEU members on the front Agreement to support planning and infrastructure
lines of the crisis. The ministry plans to distribute an related to regional economic growth where intensive
additional 73,161 Naloxone kits (+150%) over the industrial activities occur outside the boundaries
total distributed in 2018/19. of the Peace region’s municipalities. In addition,
MAH will issue a grant payment of $62 million to
Additionally, the ministry is targeting increasing the
the Capital Regional District in 2019/20 towards the
number of people on opioid agonist treatment, but
completion of the Core Area Wastewater Treatment
will implement that initiative on a region-by-region
Project.
basis rather than setting provincial targets.
Housing
Outside the MHA budget, Budget 2019 announces
$74 million for mental health prevention and early The 2019 MAH budget allocates $32.4 million
intervention programs for children, youth and young (+7.1%) in new funding for housing, raising that
adults under MCFD. As well, $20 million over three amount to $486.4 million for 2019/20. Spending on
years has been committed through several ministries housing is projected to rise again to $504 million
and agencies to assist First Nations communities with (+3.6%) in 2020/21 and to $539 million (+6.9%) in
addressing the overdose crisis. 2021/22, in line with commitments announced in
Budget 2018. Modest new investments in housing
Also mentioned (but without budget lines attached)
announced in Budget 2019 include funding for
were more foundry centres for youth 12-24, more
200 additional units of modular housing beyond
programs including in schools for parents and
the 2,000 announced last year, and $15 million
families to support early years development and
over three years to develop a provincial homeless
more specialized family care and day treatment for
response strategy. Capital spending allocated to
young peoples.
housing will rise from $227.7 million in 2018/19 to
While progress continues to be made, the BCGEU $247 million (+8.5%) in Budget 2019, in line with
advocated in this year’s pre-budget submission for previous commitments.
more robust investments to address this ongoing
The budget also pledges $10 million to establish a
public health crisis related to opioids.
provincial rent bank, which will provide funding “to
community organizations to operate rent banks by
Ministry of Municipal Affairs and providing short-term loans with little to no interest to
Housing (MAH) low-income tenants who can’t pay their rent due to a
While the total Ministry Municipal Affairs and financial crisis.” Depending on the scale, these rent
Housing operating budget for 2019/20 is up $154 banks could provide a valuable financial backstop to
million (+22.8%) to $828.3 million, the bulk of this vulnerable renters and those at risk of eviction from
increase is recorded under transfers to local govern- non-payment.
ments and accounts for external recoveries of costs
rather than any meaningful spending increases.
BCGEU BUDGET ANALYSIS 2019/20 14In addition, the budget for the Residential Tenancy In addition, social housing managed by agencies
Branch (RTB) will increase marginally, from $11.6 such as Metro Vancouver Housing Corporation and
million last year to $11.9 million (+2.5%) in other public and non-profit providers is typically
2019/20. It is worth noting that after Budget 2018’s self-supporting in terms of operating costs. This
more significant increase, RTB spending for 2019/20 new housing could be managed efficiently through
will be 29 per cent higher than in 2017/18, marking expanded partnerships with existing providers or
a considerable reinvestment in the RTB after a year through scaling up the provincial government’s own
of cuts and neglect under BC Liberal governments. housing management capacity.
While the BCGEU is pleased to see the government
No action on land value capture
continue the roll-out of housing investments
announced in 2018, Budget 2019 does not deliver Budget 2019 also makes no mention of calls by
on calls for government to significantly scale up the BCGEU and a growing number of B.C. local
and accelerate investments to address the province’s governments and unions to investigate land value
ongoing housing and affordability crisis. Budget capture/taxation as a new revenue source for transit
2018 promised to build 114,000 new units over 10 and affordable housing, as well as a tool to reduce
years, including $445 million over the coming three incentives for property speculation. B.C. real estate
years for mixed income social housing. However, the is worth almost $2 trillion as of January 2019—up
BC Rental Housing Coalition has called for $1.23 by more than $1.1 trillion since 2007. That is much
billion in total funding annually for new affordable larger than any other component of the provincial
rental supply, with $410 million annually coming economy, and makes up a bigger share of B.C.’s GDP
from the province. Other analysts are saying that than oil and gas does for Alberta. However, most of
even more funding is needed, with the Canadian this value increase currently goes untaxed and only
Centre for Policy Alternatives’ B.C. office suggesting benefits private investors, while driving up housing
investments of at least $1.25 billion annually are costs for B.C. residents. Land value capture is an
needed to address affordable housing in the Metro effective way to recover some of this value and use
Vancouver region alone. Moreover, it is not clear that it for the benefit of the people who live and work in
the province’s existing pace of investment and con- this province.
struction is even on-track to deliver on the 10-year
While the province and local governments would
affordable housing targets announced in 2018.
need to work together to develop a specific model
In the context of the ongoing housing crisis in many of land value taxation tailored to the needs of B.C.
B.C. communities, the BCGEU reiterates it’s call on communities, land value capture policies based on
government to expand and accelerate both its capital similar core concepts have been used to fund hous-
funding and public land contributions to immedi- ing, public transit and other public investments in
ately build new public, co-op, social and non-market many jurisdictions across the United States, Europe
housing. At a minimum, we propose that the pro- and Asia (see www.affordablebc.ca/faq).
vincial government raise its investments in general
mixed-income affordable housing construction to BC Housing
one-third of the total amount recommended by the
BC Housing’s budgeted expenditure for 2019/20
BC Rental Housing Coalition.
is $1.4 billion, up $167.6 million (+13%) from
While the capital costs of a more extensive invest- 2018/19. Expenditures are expected to rise again to
ment in housing would add to the provincial debt, $1.6 billion (+10.3%) in 2020/21.
current ratios of debt-to-revenue and debt-to-GDP
Expenditures drop back slightly to $1.5 billion
in the province are healthy enough to permit the
(-6.2%) for 2021/22, but are nonetheless higher than
borrowing that this would require. Capital costs
in 2018/19 and 2020/21.
could be partially recovered over time through rents.
BCGEU BUDGET ANALYSIS 2019/20 15You can also read
