VICTORIA - A tax cut for middle-class and working British Columbians, over 40,000 new jobs, a surplus budget and new action to reduce debt are highlights of the 1996 provincial budget, brought down today by Finance Minister Andrew Petter.
"Taxes are down. Jobs are up. The budget is balanced. Health care and education are protected," said Petter.
"B.C. voters told us in the recent election campaign that they also want to see us work harder to cut the cost of government and reduce the debt," said Petter.
"We're announcing action today that will do exactly that: a comprehensive review of all government programs and a freeze on all new capital projects while a review of capital spending takes place."
Tax cuts for B.C. families and small business
"The centerpiece of this budget is a tax cut for British Columbians and small businesses," said Petter.
"And we will be passing a new law that freezes other taxes and prohibits any new taxes on individuals and their families until the year 2000."
British Columbians will also benefit from a freeze in BC Hydro rates, ICBC premiums and college and university tuition fees.
The first tax cut takes place this Monday, July 1, when the provincial personal income tax rate will be reduced by one percentage point. It will be cut a second point in 1997. The tax reduction will be capped for taxpayers earning more than $80,000.
"The income tax cut, combined with the BC Hydro and ICBC rate freezes and the post-secondary tuition fee freeze, will save the typical B.C. family of four making $55,000 a year up to $500 annually," said Petter.
Other tax measures include raising the threshold for the home owner grant so that 96 per cent of British Columbia homeowners receive the full benefit of the grant. And the property transfer tax threshold is increased so more first-time home buyers will be exempt from the tax - saving them up to $3,500 on the purchase of their home.
"A tax cut for small businesses - the sector of the economy that creates the most jobs - will provide $29 million in tax relief," said Petter.
Effective July 1, 1996, the small business income tax rate is cut by 10 per cent. A two-year income tax holiday will be in effect for new, small businesses incorporated on or after May 1, 1996 and on or before March 31, 2001.
Responding to voters concerns about the cost of government and government debt
"This budget builds on the progress we've made to reduce the cost of government. Real per capita spending will go down by 2.2 per cent from 1995/96 levels."
The 1996 budget will produce a surplus of $87 million. Total government debt will be reduced by $99 million while direct debt will decline $53 million.
"We've taken a number of actions to cut the cost of government and balance the budget, while protecting health care and education. But voters have made it clear they want to see more cost-cutting and a new emphasis on debt reduction," said Petter.
"The voters have spoken. We've listened. And today, we're announcing two new actions to cut the cost of government and reduce B.C.'s debt."
Effective immediately, the government will undertake:
Projects now under construction or to which the government is legally committed will proceed. All other capital spending is frozen pending the review, which will be completed this fall.
Other recent actions to cut the size and cost of government include:
Protecting health care and education
"British Columbians voted to protect funding for health care and education. That's exactly what we're doing in this budget," Petter said.
Actions taken this year include:
Jobs are a top priority
The budget forecasts strong economic growth of 2.7 per cent this year: 40,000 new jobs will be created in 1996 and 43,000 in 1997.
New initiatives include:
Special emphasis will be placed on protecting the salmon fishery with the development of a strategy that conserves fish and protects the jobs and coastal communities that depend upon them.
"We will also introduce a comprehensive jobs plan that brings together business, working people, communities and government to build on our success in protecting and creating jobs," said Petter.
"Today's budget marks the beginning of a new mandate for this government. We will turn now to the challenge of lowering debt while ensuring continued economic growth and protecting health care and education," said Petter.
"This budget shows that the government is listening to British Columbians and acting on their concerns.
"We are cutting taxes, taking action to reduce debt, creating jobs and protecting the key services that British Columbians expect from their government."
BC Ministry of Finance and Corporate Relations
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