B.C. is using part of its growing surplus to reduce personal income taxes by 10%, claiming the title of the lowest provincial rate in Canada for people earning up to $108,000 per year.

Even with the rate cut, the finance ministry expects to collect more than a half billion dollars in extra tax revenue this fiscal year, thanks to a booming economy with more people working.

For those who aren’t working, the housing allowance for income assistance clients goes up $50 to $375, the first increase since 1992. There is an additional $50 in the basic rate for single employable people and single parents, who last saw a 2% increase in 2000. With the increases, the monthly welfare cheque for a single employable person rises to $610, and for a single parent with one child it goes up to $946.

Finance Minister Carole Taylor pitched the 2007 budget as the most aggressive housing program in B.C. history, to help people rent, buy or keep their homes with prices that soared by an average 24% last year. Along with previously announced increases to eligibility for the homeowner’s grant and rental assistance program, the government has set up a $250 million housing endowment fund that is expected to generate $10 million a year interest to fund innovative housing solutions for a growing and aging population.

With a surplus forecast to reach $2.8 billion this year despite the latest tax cut, Taylor said the endowment fund is part of “our moral obligation to set aside some for the future.”

Critics suggested there were other moral obligations that were overlooked.

B.C. Federation of Labour president Jim Sinclair said that instead of a tax cut, the government should have restored funding to programs that it cut in its first term in office. He added that the government’s financial position shows it could have easily afforded a 10% cut in tuition fees.

“That would have cost 90 million bucks,” Sinclair said. “It would have sent a clear signal to young people that would say, this budget is about you and your future, not about some ideological claim that we need tax cuts.”

One of the larger percentage ministry budget increases is for Aboriginal Relations and Reconciliation, which expects to ramp up treaty negotiations this year as three final agreements are put to votes. The ministry is adding $13 million to its negotiation budget and expects to increase staff from 132 to 179.

Green efforts rapped

The B.C. government expects to pay for its new $25-million climate change innovation fund through a surcharge on public utilities such as hydro and natural gas fees, Finance Minister Carole Taylor said.

As indicated in last week’s throne speech, B.C. will buy 20 new hydrogen powered buses for $45 million (more than twice the price of electric trolleys), and extend its sales tax breaks for hybrid cars, Energy Star furnaces and alternative fuels. A budget of $4 million is established to fund a new climate change secretariat.

Sierra Club of B.C. campaign director Lisa Matthaus said the budget contradicts the government’s “visionary” throne speech, which promised a one-third cut in greenhouse gas emissions by 2020.

Matthaus pointed to a budgeted 40% increase in subsidies for oil and gas exploration, and a $100 million increase in spending to expand Highway 1 into Greater Vancouver and twin the Port Mann Bridge.

“Both of these initiatives will increase our greenhouse gas emissions and take us in the wrong direction,” she said.

Environment Minister Barry Penner said the B.C. government is sharing costs of the new SkyTrain Canada Line in Vancouver, which is estimated to take the equivalent of 100,000 cars off the road.

“We’ve got some very bold and aggressive targets that we think are reachable,” Penner said, adding that the new policy of zero carbon emissions from coal-fired power plants is the toughest standard in North America.

Business has beefs

John Winter, president of the B.C. Chamber of Commerce, said he was disappointed there weren’t provincial sales tax breaks for the purchase of new machinery and equipment. Industry has a greater demand for new machinery to help make up for the increasingly scarce and expensive labour.

“We’re concerned about what’s going to keep the economy churning for the next 12 months,” Winter said.

That sentiment was echoed by Rick Jeffery, president of the Coast Forest Products Association, who was also looking for a cap on municipal taxes to help promote investment in heavy industry.

“Communities cannot continue to depend on the flagging coastal forest industry for their revenue needs,” Jeffery said.

Help for homeless

The B.C. government’s budget includes $27 million to keep 300 emergency shelter beds open year-round. The province funds 1,100 shelter beds, most of which are available for cold and wet weather.

A fund of $38 million is also included in the budget to finance supportive housing projects, including 600 shelter beds, transitional housing and permanent housing to be operated mainly by non-profit societies.

One of those is a transition housing project on Vancouver Island for young men who have completed drug detox.

BCTF disappointed

BC Teachers’ Federation president Jinny Sims said she was disappointed to see that the education ministry didn’t receive extra funds to finance caps on class size and special needs students per class.

“We have nothing in there to address the real needs of B.C. students,” Sims said. “Nothing in there for special needs students, nothing for students that need learning assistance, ESL, or students who need extra counselling.

Sims estimates that the education budget is declining as a percentage of gross domestic product in B.C.

tfletcher@blackpress.ca