British Columbia has tabled Budget 2023/24 – the first under Premier David Eby and new Finance Minister Katrine Conroy. Since taking office in November, Eby has been spending money at a record pace, using much of BC’s $5.7 billion surplus from last year’s budget to make funding announcements on affordability, a $500 million Rental Housing Fund, $1 billion in grants to municipalities for local infrastructure, and much more. Eby has said since becoming Premier that he believes in investing in people, and the Throne Speech earlier this month promised “record new investments” in health care and housing for middle-class families.
Budget 2023/24 delivered on that promise of more big spending, making record investments in mental health and addictions, health care, housing, and affordability measures.
But in doing so, the Province of British Columbia goes from a $5.7 billion surplus in 2022/23 to a $4.2 billion deficit in 2023/24.
The top story of this budget is big spending on important areas like health care and housing contrasted with the large $4.2 billion deficit.
Fiscal Overview
Budget 2023/24 goes from a $5.7 billion surplus in 2022/23 to a $4.2 billion deficit in 2023/24, followed by a $3.8 billion deficit in 2024-25 and a $3.0 billion deficit in 2025-26. This whopping turnaround will be a major focus of this budget and sharply demonstrates a political difference between the BC NDP and the BC Liberals.
The government expects economic growth to slow to 0.4% in 2023, which they say reflects a slower global economy as well as the combined effects of higher prices and raised interest rates throughout Canada.
Revenue is expected to drop by almost $5 billion from the last fiscal year but expenses are expected to grow by nearly $6 billion.
Key Investments
Health Care
The budget commits $6.4 billion total to new health care spending over the next three years, including a $270 million commitment over three years towards cancer care services, and $1 billion towards a health workforce strategy, which will add 1,700 staff and 3,000 trained graduates to the province’s health care workforce. Key initiatives supported by this funding include a new deal for BC family doctors, new career bursaries and grants, and recruiting internationally trained doctors and nurses.
The budget also commits $1 billion in new funding over the next three years towards mental health and addictions treatment – the largest investment in mental health and addictions in the province’s history. The funding is intended to support services that exist across the spectrum of care and includes support for initiatives such as complex-care housing, treatment and recovery beds, and expansion of comorbid mental health and addictions treatment. Commitments to mental health treatment also comprise part of the budget’s plan to bolster public safety, which involves adding 250 more RCMP officers in rural BC, as well as updating the Police Act, opening 10 more Indigenous Justice Centers, and expanding mental health crisis response teams across the province.
Housing
$4.2 billion in new funding has been put towards housing as BC continues to grapple with the worst housing prices in the country. The government has committed to building new student housing spaces and has implemented a new renters’ tax credit which provides up to $400/person for middle- to low-income renters. This credit fulfills the long-awaited renters’ rebate promise made in the 2017 election. All the government’s housing project commitments will be built using mass-timber technology, which will help create jobs in the province and is intended to bolster the forestry sector and reduce the carbon footprint of housing developments. In addition, the Budget referenced several new actions to be announced in a refreshed housing strategy to be released sometime in spring 2023.
Affordability
While Eby has already spent nearly $2 billion towards affordability initiatives since he took office, he has committed to implementing several other affordability initiatives. $4.5 billion will be put towards helping BC residents with the rising costs of essentials, including through expanding the BC Affordability Credit, implementing a 10% increase to the BC Family Benefit, and making prescription birth control free of charge (a key promise from the 2020 election). The budget also commits to a 33% increase in the province’s shelter rate for those on income assistance. Car insurance rates will also be frozen for the next two years, and the interest-free student loan maximum will be doubled to bring much-needed help to post-secondary students across the province.
Climate Change
Among the big-ticket investments is a $1 billion commitment towards fighting climate change over the next three years, which is intended to build upon the province’s CleanBC Commitments. Eby has also promised to enhance the province’s Climate Action Tax Credit, pilot electric vehicle programs, and work with First Nations towards strengthened environmental agreements like the one recently ratified with Blueberry River First Nations. The budget’s climate change commitments were framed under the banner of sustainable economic growth and emphasized sustainability and innovation as key components of the province’s economic strategy.
Reaction from the Opposition
Official Opposition Leader Kevin Falcon said that Eby’s government is spending too much money in too many areas without any concrete results. Falcon says he will be focused on whether the budget is able to improve wait times at walk-in clinics and bolster public safety across the province. BC Liberal Finance Critic Peter Milobar said that this budget was nothing different from what has been seen in the previous six budgets introduced by the current government, in that it made major spending promises that would be unlikely to deliver concrete results. The BC Liberals emphasized that record investments were not translating into progress on major issues such as housing, mental health, and health care.
Key Takeaways: What Budget 2023 tells us about the Eby Government
The Eby government has framed Budget 2023/24 as one about political choices – the choice to make investments in people versus the choice of austerity. The Eby government views its hefty investments in healthcare, mental health, housing and childcare as economic investments to help British Columbians weather forecasted economic downturn in the future. Former Premier John Horgan used to say “the economy is people and people are the economy”, and Premier David Eby is doubling down on that mantra and using it to frame Kevin Falcon and the BC Liberals as opposed to more childcare, more housing, and more healthcare. With economic winds darkening, a clear political wedge on deficits versus spending is emerging, which will shape the narrative leading up to the scheduled October 2024 election. They key question will be whether Eby’s record investments are making a difference on the key challenges facing British Columbia on housing, health care, and the cost of living.
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