VANCOUVER, February 22, 2024 – The 2024 budget promises to address the needs of British Columbians in the face of ongoing affordability challenges, with a focus on enhancing housing availability and maintaining robust levels of capital investment, particularly in transportation and health care facilities. The Chartered Professional Accountants of B.C. (CPABC) acknowledges the government’s commitment to boosting the housing supply and supporting infrastructure development but notes the absence of a clear strategy to stabilize the provincial debt over the next three years.
“Housing affordability remains one of the biggest economic issues facing British Columbians.” said Lori Mathison, FCPA, FCGA, LLB, president and CEO of CPABC. “We’ve seen both rental and owned housing costs surge over the last year, so policies aimed at relieving those pressures are welcome.”
The new budget highlights a number of new initiatives focused on increasing the supply of affordable housing units as well as influencing the demand side. Through the BC Builds program, the province plans to leverage its access to lower financing costs and underutilized public land to boost housing supply in areas where it is most needed. According to a recent report from the Canadian Mortgage and Housing Corporation, Metro Vancouver’s rental vacancy rate was just 0.9%, the lowest among Canada’s major markets. On the demand side, a new flipping tax is intended to deter speculation in residential housing. In addition, an expansion of the First Time Home Buyers program and tax changes respecting new home and rental construction are intended to help address affordability.
The 2024 budget promises the largest capital spending package on record, with an emphasis on healthcare and transportation infrastructure projects. Taxpayer-supported capital spending is expected to increase by 39.5% to $14.1 billion in 2024/25. In total, taxpayer-supported capital spending is expected to reach a cumulative $43.3 billion over the next three years.
"Budget 2024 allocates much-needed resources towards infrastructure projects that aim to support the province’s growing population.” continued Mathison. “Given that population growth from international immigration is expected to remain near record levels in the coming years, robust capital investment is vital to ensuring that British Columbians can access the services they need. It’s all about creating the right conditions for newcomers to make positive contributions the economy and in their communities.”
The budget also provides some relief to small businesses struggling with rising costs by raising the Employer Health Tax exemption threshold from $500,000 to $1,000,000. The updated policy is expected to save businesses a total of $100 million annually. Meanwhile, additional funding of $228 million over three years to the Future Ready Action Plan aims to help employers recruit and access talent. With the province forecast to have over a million job openings over the next decade, labour shortages will continue with some industries experiencing significant strain.
The provincial deficit is estimated to rise to $ 7.9 billion in 2024/25, or 1.9% of GDP, with marginally smaller deficits expected for the following two years. As a result, BC’s taxpayer-supported debt-to-GDP ratio is estimated to push higher in 2024/25 to 21.0%, up from 17.6% in 2023/24. Taxpayer-supported debt-to-GDP is anticipated to continue to climb in the medium term, reaching 27.5% in 2027/28.
"We have seen provincial spending pick-up over the last couple years which has had an adverse effect on the province’s debt ratios," concluded Mathison. "In light of recent economic uncertainty, characterized by persistent inflation, higher interest rates, and slowing growth, we continue to emphasize that a clear pathway towards a balanced budget is necessary to safeguard the province's ability to navigate future economic challenges effectively."
For more information, contact:
Jack Blackwell, Economist
news@bccpa.ca
604.259.1143
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 40 ,000 CPA members and 6,000 CPA students and candidates. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy.
