24 Feb 2016 The Voice: 2016 BC Budget

Posted at 01:55h in BC Tech Blog, The Voice by
Author: Bill Tam

On February 16th, the BC Liberal Government released its 2016 Budget, reinforcing the province’s strong position in terms of economic performance and fiscal heath.

BC has achieved its fourth consecutive year of a balanced budget, with a surplus of $264 million this year, and is projected to achieve modest surpluses of $287 million in 2017 and $373 million in 2018. The government forecasts GDP growth of 2.4% for this year and 2.3% for next year, keeping them on track to eliminate operating debt of $1.6 billion by 2020 – the last time BC was debt-free was 1975.

It is promising for our technology community to see the government emphasize the importance of knowledge-based sectors in this strategic plan, with a special mention of the significant contributions of the tech industry and its five sub-sectors to the BC economy. The budget mentions the government’s vision for technology in this province is to be a recognized leader in growing innovative tech companies, and for BC to be a destination for tech investment.

That being said, the key announcements pertaining to the technology industry were made in the previously launched #BCTech Strategy, and the budget simply reiterates some of these key elements.

Here are some of the elements in this budget announcement that relate to the technology industry:

  • Increase to Angel Tax Credit Program. There will be a permanent increase in the Small Business Venture Capital Tax Credit budget to $35 million annually. This is a welcome increase of $5 million from previous levels.
  • Modest Increase to Funding for Post-Secondary.  Funding has been increased for the Ministry of Advanced Education from updated forecast for 2015-16 of $1,961 million to $1,986 million for 2016-17. While there will be an investment of $1.68 billion in K-12 schooling, including coding added to the curriculum, there are no new noteworthy program initiatives in the post-secondary sector.
  • Continuation of the Innovative Clean Energy Fund. A further $13 million has been identified in 2015/16 within the Innovative Clean Energy Fund, in support of government’s energy and environmental priorities. This includes additional funding for the Clean Energy Vehicle Program to provide British Columbians incentives when considering the greener choices for their transportation needs.

Recently, there have been concerns raised by our tech community as it relates to affordability in the lower mainland and its impact on attracting and retaining talent. There are some, albeit modest, measures put into place in the budget that seek to address aspects of this issue:

  • Property Transfer Tax Exemption. Effective February 2017, new housing up to $750,000 will be exempt from the Property Transfer Tax. This will mean a savings of $13,000 to homebuyers at the margin. Revenue lost in this measure will be somewhat offset by an increase from 2% to 3% on homes priced over $2 million.
  • Increase Supply of Affordable Housing. The B.C. government will contribute $355 million to construct or renovate 2,000 affordable housing units across the province over five years. 

Other key budget announcements include new investments to support BC families and communities, including $673 million over three years for Ministry of Children and Families and Social Development and Social Innovation; and $3.2 billion over three years for the Ministry of Health.

With the pending election in 2017, there were not a lot of surprises in the budget. The plan continues to support BC’s favoured credit rating and paints an optimistic picture of economic growth, while focusing on debt-reduction. The budget further reinforces the importance of a diversified economy, one that supports industries like technology and knowledge-based industries that advance BC’s innovation agenda.

The full 2016 BC Budget is available online.

We welcome your input to shape our policy framework and grow BC’s technology industry. To provide your feedback or participate in BCTIA’s policy and advocacy efforts, please email policy@bctia.org.