|Ministry of Finance and Corporate Relations|
109 617 Government Street
Victoria, B.C. V8V 1X4
Phone: (250) 356-5975
TO STIMULATE B.C. ECONOMY,
AND CREATE JOBS
|For immediate release
March 30, 1998
VICTORIA -- The 1998 provincial budget announced today by Finance Minister Joy MacPhail presents a three-year plan to stimulate the B.C. economy, increase competitiveness, encourage investment and create new jobs.
The budget cuts taxes for 40,000 small businesses; 90 per cent of businesses will pay no corporation capital tax by 2001. Personal income tax rates are cut by two per cent and the top marginal tax rate will be lowered over three years from 54.2% to 49.9%. A B.C. Hydro rate rebate gives money back to businesses and households. Other provincial taxes and fees are reduced or frozen.
Tax reductions announced today total $95 million this year and $415 million when fully implemented over the next three years.
Additional incentives, tax reductions and regulatory reform will be announced shortly for B.C.'s forestry, mining, and oil and gas industries.
To help businesses work with government, a Business Advocate and Small Business Task Force will propose ways to streamline regulatory processes, prune red tape, improve competitiveness, attract investment and create jobs in B.C.
Legislation will be introduced to cut red tape by streamlining filing and registration requirements, eliminating duplication, increasing one-stop access and simplifying approval processes.
Forest industry costs will be cut through stumpage reductions and by simplifying the regulatory framework to generate investment and jobs in forest communities. B.C.'s mining industry gains better access to lands for exploration and greater mineral tenure certainty. Incentives for exploration and development in the oil and gas sector are to be announced shortly.
The Agriculture Ministry's budget has been increased to help farmers recover from weather-related crop failures in the Peace River, Okanagan, Lower Mainland and Vancouver Island regions and the fuel-tax has been dropped for farmers.
B.C.'s new economy such as high-tech, knowledge-based industries, film and TV production is growing rapidly, based on highly skilled people, and high quality of life.
The $15 million Film Incentive BC, announced in October, will help home grown productions and film locations outside the Lower Mainland. Assistance for foreign film production will be announced shortly. The sales tax on 1-800 phone services is eliminated May 1 to create more jobs in the telecommunications sector.
Budget '98 provides $1.25 billion for schools, hospitals, roads and transportation projects -- an increase of $275 million.
B.C. personal income tax rates are reduced by two per cent. This will be the fourth year in a row that the province has cut taxes for low- and middle-income families. All provincial tax rates for families and individuals remain frozen. ICBC premiums and university tuition fees also stay frozen.
The BC Family Bonus, introduced by this government in 1996, continues to provide financial relief for 230,000 BC families. The province will cut the cost of Medical Services Plan premiums by up to $172 for 80,000 British Columbians with modest incomes.
Budget '98 includes a $228 million increase for health care, providing new funding for B.C. hospitals, the new mental health plan, Pharmacare, and reducing waiting lists for heart, cancer and kidney patients.
A $100 million funding increase for the K-12 education system adds 400 new teachers to B.C. classrooms and 300 additional librarians, counsellors and classroom aides. As well, the government commits $1.5 billion for school capital construction over the next five years, with the first $339 million in this year's budget.
B.C.'s post-secondary education system receives a $40 million increase to add 2,900 new spaces at B.C. colleges and universities and boost student financial assistance. The freeze of college and university fees will be extended for 1998/99 for 150,000 students.
A total of $36 million is provided for youth employment and training programs to help 17,000 young people make the transition to the workforce in 1998/99.
The BC Family Bonus which supports working families is now a model for Canada. Budget '98 includes a funding increase of $64 million for the Ministry of Children and Families to help children who are most at risk.
In the 1997/98 fiscal year, provincial government spending was down for the first time in 40 years. Total expenditures were $100 million less than the year before. Provincial revenue was on target at $20.2 billion despite a slowdown in forest revenues.
Provincial tax-supported debt is $780 million less than projected. British Columbia's debt-to-GDP ratio is estimated at 20.5% -- well below the target set in the province's financial management plan.
Budget '98 is based on a prudent forecast of 0.3 per cent growth in the B.C. economy. Revenue is forecast to increase by $230 million. Expenditures are to rise by $141 million -- growth of 0.7 per cent. To protect health and education priorities, $278 million is being cut from other programs and government administrative overhead.
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