On February 22, 2024, the B.C. government released the Budget 2024, which focuses on housing and reducing everyday costs for British Columbians.
The budget projects a record $7.9 billion deficit for the 2024-25 fiscal year, which is higher than the projected $5.9 billion deficit for the 2023-24 fiscal year. B.C.’s total provincial debt is forecasted to increase by $20 billion to $12.3.2 billion, with $88.6 billion in debt supported by taxpayers, up from $71.8 billion last year. The taxpayer-supported debt-to-GDP ratio, a measure of government affordability, will climb to 21% from 17.6% in 2023-24, and is expected to reach 27.5% by 2026-27, almost double that of 2018-19.
Of significance to our sector and relief for smaller businesses, especially the 94% of BC’s road transportation companies that currently operate 10 or fewer vehicles, is the raising of the payroll exemption threshold for the Employer Health Tax (EHT) from $500,000 to $1 million. While this will reduce business payroll taxes by $100 million each year and is much-welcomed news for our industry, the EHT will increase from 2.925% to 5.85% for businesses with payroll between $1 million and $1.5 million, with the rate above $1.5 million remaining unchanged.
Other key budget spending highlights for our sector include:
Transportation and Infrastructure
Budget 2024 surpassed its previous transportation infrastructure investments by allocating $15.5 billion over the next three years toward enhancing and redeveloping transportation networks. The B.C. Ministry of Transportation and Infrastructure’s capital spending increased from $2.5 billion to $3.9 billion in this year’s budget. Keu transportation infrastructure investments include:
- $2.3 billion toward Highway 1 264th Street to Mount Lehman Road, Phase 3A of the Fraser Valley Highway 1 Corridor Improvements Program. This includes a new 264th Interchange, improvements to the Mount Lehman Crossing, the replacement of the Bradner Overpass and 13.2 km of widening along various sections of Highway 1. Expected completion is 2028.
- $500 million allocated in 2024/25 to the Fraser Valley Highway 1 Project which will grow to nearly $800 million in 2025/26. Completion of the highway widening is expected by 2026.
- $4 billion to construct the Surrey Langley SkyTrain, adding 16 km extension to the existing Expo Line that will run along Fraser Highway from King George station to 203 Street in Langley City. Expected completion is in 2028.
- $130 million for improvements along Highway 7 between 266th and 287th Street including a four-lane four kilometre road extension and widening of 272nd St & River Road intersection to accommodate large commercial vehicles. The expected completion is 2025.
- Existing and ongoing projects: $4.2 billion to construct an eight-lane immersed tube Fraser River Tunnel to replace the George Massey Tunnel. Expected completion date is 2030. $1.4 billion is going toward the Pattullo Bridge replacement. $287 million is going toward the permanent construction of sections of Highway 1 and Fraser Thompson Corridor to address damages caused by the 2021 atmospheric floods.
Widening of Highway 1 in the Fraser Valley, and Highway 1 Corridor Improvements Program have been some of the top infrastructure priorities of BCTA members in the past decade and the Association is happy to see that the Province is making much-needed investments to address the growing needs in the region. Further, the Association supports transit-oriented investments that give commuters greater access to different modes of transportation which reduces congestion, improves safety, and supports emission reduction across the transportation sector. Collectively, this helps BCTA members and the industry at large in moving goods much more efficiently.
However, while BCTA fully supports continued efforts to invest in safe, innovative, and reliable transportation and infrastructure planning projects throughout the province, the cost attached to climate-related disasters, inflationary pressures, and global economic uncertainties are of critical importance when considering the pace at which these improvements to our infrastructure and roadways are carried out.
New Investments to Support CleanBC
Budget 2024 provides $1.3 billion in new spending measures to mitigate climate related challenges and support investments that move B.C. toward a cleaner economy. New measures include:
- $318 million over the fiscal plan period to continue CleanBC grant and rebate programs for clean transportation, energy efficient buildings, and communities. Additionally, funding will support the development and implementation of regulatory measures to continue the transition to a low-carbon economy.
BCTA has been actively calling on the government to revise the Medium to Heavy-duty Zero-Emission Vehicle (ZEV) Mandate, and instead invest in mitigating the existing barriers that limit the industry’s efforts to transition to ZEVs.
- $30 million to continue the implementation of electric vehicle public charging infrastructure across the province.
- $50 million in capital funding over the next three years in Active Transportation infrastructure and $27 million to school districts to buy electric school buses.
- $252 million of additional funding over the next four years to increase the Province’s capacity and response to future climate related emergencies.
Comments from the Business Council of B.C.
The B.C. budget projects a nearly $8 billion deficit this fiscal year and serially large deficits over the forecast horizon. In October, the Bank of Canada Governor indicated that monetary and fiscal policy should be “rowing in the same direction” to cool inflation that is hurting family budgets. At 1.9% of GDP, this year’s deficit is significantly larger than last year’s, which was the largest among the provinces and second only to the federal government. This budget continues at an unhelpful pace of spending and borrowing that is stimulative despite B.C.’s inflation rate being 3.0% year-over-year in January.
“We do not agree the government should be running large operating deficits when the economy is near full capacity and people are struggling to pay the bills because of inflation,” says Ken Peacock, BCBC’s Chief Economist.
Read more on the BCBC website.
For more information:
View the Standing Committee’s Report on the Budget 2024 Consultation