MSP hike off as real estate lifts B.C. budget surplus

Property transfer tax expected to rake in nearly $1 billion more than planned for 2016

B.C. Finance Minister Mike de Jong.

The B.C. government has scrapped a planned medical premium increase next year now that the province’s surplus has ballooned to nearly $2 billion.

The red hot real estate market is a big factor behind the improved financial picture detailed in the first quarter budget update released Thursday.

Property Transfer Tax revenues for 2016 are now forecast at $2.1 billion – an increase of $965 million over the budget – with $165 million projected to come from the new 15 per cent tax on foreign buyers of Metro Vancouver homes.

The property transfer tax now far eclipses the $1.2 billion in forecast gambling revenue from the B.C. Lotteries Corp. and is just short of the $2.35 billion B.C. gets from all forestry, natural gas and other resource royalties.

The currently forecast surplus for the year of $1.94 billion is up from $264 million in the budget. And that’s after the province set aside $500 million for new housing priorities and other yet-to-be-announced measures.

“About half the value of the increased revenue from the Property Transfer Tax – $500 million – will be invested in new programs to benefit housing affordability and $400 million will be invested in the B.C. Prosperity Fund as a legacy for future generations,” Finance Minister Mike de Jong said.

The province is forecasting stronger 2.7 per cent economic growth for B.C. for 2016, up 0.3 per cent from budgeted.

The B.C. government now forecasts continued balanced budgets with surpluses of at least $900 million in each of the next two years.

De Jong said the higher revenues have allowed the government to cancel its planned four per cent increase to Medical Services Plan premiums set for Jan. 1 that would have increased costs for an adult by $36 a year.  Premiums will go down four per cent for those who are eligible for premium assistance.

Canadian Taxpayers Federation B.C. director Jordan Bateman said the MSP premium freeze is a positive step but no great cause for celebration.

“This comes after 15 years of straight increases, more than doubling it on their watch,” he said. “So we’re not planning a parade for these guys and we still want to see (MSP premiums) scrapped completely.”

Bateman said the B.C. government uses medical premiums, rather than some more direct form of taxation for health care, so it can claim low overall taxes compared to other jurisdictions.

“A family like mine is paying $150 a month in this tax, yet it’s not calculated as part of the overall tax burden by government.”

He said the move to scrap the MSP hike shows the government is feeling pressure on cost-of-living issues.

Bateman also cautioned that revenue from the Property Transfer Tax may have peaked if the foreign buyers tax has indeed cooled what was a frenzied market with record sales and fast price gains.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Emily Harris (centre) started the in-person Monarch Moms meet-up groups in July, when it was much easier to physical distance in outdoor spaces. Harris started the group as a source of connection for women navigating the ups and downs of having a baby during a pandemic. (Nina Grossman/News Staff)
Victoria new mom group navigates challenges of motherhood in a pandemic

Monarch Moms meet once a week for physically-distanced connection

Joanne Smith has been visiting Goldstream Provincial Park since she moved to Langford two years ago. (Aaron Guillen/News Staff)
PHOTOS: Visitors flock to Goldstream Provincial Park for 2020 salmon run

‘I wanted to come here before I move back to Australia,’ says visitor

The Takaya inspired sculpture currently in Kent Laforme’s outdoor studio. The 25,000-pound piece of Vancouver Island marble could be installed on Cattle Point. (Kevin Murdoch Photo)
Stone Takaya sculpture could soon ‘howl’ at Cattle Point

Oak Bay inviting public suggestions for 25,000-pound marble sculpture

Royal Bay students are among the list of SD62 schools that will be trained by Pacific FC coaches and staff in a new soccer academy partnership. (Aaron Guillen/News Staff)
Pacific FC partners with Sooke School District soccer academies

Royal Bay, EMCS and Dunsmuir Middle students to receive professional training

Police closed McNeill Avenue after a workplace death Oct. 20, 2020. (Nina Grossman/News Staff)
Tree-pruning community gathers in Oak Bay after tragic death

Crews met in solidarity at site of Tuesday incident

Provincial health officer Dr. Bonnie Henry presents modelling of COVID-19 spread in B.C., March 25, 2020. (B.C. government photo)
B.C. sets another COVID-19 record with 203 new cases

up to 1,766 active cases in B.C., two more deaths

Advance polls are open from Oct. 15 to 21 with election day on Oct. 24. (Black Press Media file photo)
École de L’Anse-au-sable. (Google Maps)
B.C. records first COVID-19 outbreak at school, six weeks after students return to class

Three cases of the virus have been identified at École de L’Anse-au-sable

Green Party leader Sonia Furstenau is seen as she leaves media event during a campaign stop in West Vancouver, B.C., Tuesday, October 20, 2020. THE CANADIAN PRESS/Jonathan Hayward
B.C. Green leader hopes voters see value in minority government

The Greens received nearly 17 per cent of the popular vote in 2017 yet received just three seats

Local candidates Pam Alexis, Abbotsford-Mission, and Preet Rai, Abbotsford-West, look on as NDP Leader John Horgan main streets in Abbotsford, B.C., Wednesday, October 21, 2020. THE CANADIAN PRESS/Jonathan Hayward
B.C. NDP takes snap election risk during pandemic in quest for majority government

Green Leader Sonia Furstenau said the election was unnecessary and irresponsible during the pandemic

Liberal Leader Andrew Wilkinson speaks during a drive-in car rally campaign stop at a tour bus operator, in Delta, B.C., on October 17, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C. Liberal Leader maintains confidence as campaign tests party identity

Liberal campaign has been disrupted by controversy

RCMP. (Phil McLachlan - Black Press Media)
British Columbia man dies during ski trip near glacier west of Calgary

Kananaskis Public Safety and Alpine Helicopters responded around 2:30 p.m.

Prime Minister Justin Trudeau arrives on Parliament Hill in Ottawa on Monday, Oct. 19, 2020, following a week-long break for the House of Commons. THE CANADIAN PRESS/Sean Kilpatrick
One crisis after another for Trudeau since last federal election one year ago

It has been a year of unprecedented calamity and crisis

Members of the Sipekne’katik First Nation load lobster traps on the wharf in Saulnierville, N.S., after launching its own self-regulated fishery on Thursday, Sept. 17, 2020. THE CANADIAN PRESS/Andrew Vaughan
Vancouver Island First Nations back Nova Scotia’s Indigenous lobster fishermen

Nuu-chah-nulth Tribal Council calls for action before lives are lost

Most Read