Just three days after announcing the new $44-billion provincial budget, finance minister and Abbotsford West MLA Mike de Jong was back in his home riding to talk to members of the Chamber of Commerce on Friday morning.
The budget proposes to balance the books using increases to income tax, Medical Services Plan premiums and the sale of about two per cent of the province’s assets. It also calls for a $2 increase in taxes per carton of cigarettes, which would go into effect Oct. 1.
Taxpayer benefits in the budget will help families, including an educational savings grants and funding for childcare.
Of particular interest to the Chamber of Commerce is the proposal to implement income tax increases on business. The corporate income tax rate would rise one point to 11 per cent effective April 1.
Abbotsford Chamber executive director Allan Asaph has already gone on record indicating that the chamber is generally supportive of the budget but “not necessarily thrilled” with the tax increase. He said the increase will put pressure on businesses.
De Jong said Asaph’s comments were bang on and believes businesses appreciate that the government is maintaining the spending discipline needed to get the budget balanced.
“When we announced a year ago that we were contemplating a one per cent increase in the corporate income tax rate, they (businesses) weren’t doing cartwheels. I didn’t expect them to. So when we confirmed that that’s going to happen, I don’t expect them to be standing and cheering,” said de Jong.
However, he added that business does understand the importance of creating a balanced budget and practising fiscal responsibility.
“Businesses, small businesses around town and around the province know that that’s what they have to do.”
Other tax increases contained in the budget include personal income taxes for those earning $150,000 or more rising 2.1 per cent to 16.8 per cent for two years, starting next January. That increase would be rolled back to the current rate of 14.7 per cent in 2015.
Budget critics have questioned whether the new plan would create a balance, but de Jong said he is confident the government has taken “steps to make sure the budget withstands reasonable, rational, fair scrutiny.
“On the revenue side the budget is sound and on the expenditure side we’ve demonstrated over the last number of years that we can bring the kind of spending discipline to bear.”
He said political opponents are more comfortable criticizing a plan than offering any alternatives.
“The only thing we’ve heard so far, for example the NDP, is some vague reference to the fact that they don’t contemplate balancing the budget for four or five years.”
He said it’s easy to put off a tough decision.