Provincial budget draws mixed reactions 

MRDT changes, MSP 'payroll tax' present sticking points

click to enlarge PHOTO COURTESY OF THE PROVINCE OF BRITISH COLUMBIA - FOR THE PEOPLE Finance Minister Carole James presents the B.C. NDP's first provincial budget on Feb. 20.
  • Photo courtesy of the Province of British Columbia
  • FOR THE PEOPLE Finance Minister Carole James presents the B.C. NDP's first provincial budget on Feb. 20.

While many will say there is much to like about the BC NDP's first provincial budget — which aims to "put people first" with an emphasis on improving affordability — critics have no shortage of ammunition, and many questions left to be answered.

"There's a lot there, and there's a lot that's really not well defined or fleshed out," said local BC Liberal MLA Jordan Sturdy.

"Overall, there is some investments that certainly I welcome, although it's hard to know how they'll actually play out for us in the Sea to Sky."

One point in particular that sticks out to Sturdy is the plan to expand Municipal and Regional District Tax (MRDT) requirements to allow the income to be spent on affordable housing (previously, the MRDT, or "hotel tax," could only be used for tourism marketing, programs and projects).

Firm details of the expansion have yet to be revealed.

"That I just think is atrocious, frankly. It puts municipalities in a very, very difficult situation. It pits tourism marketing against employee housing," Sturdy said.

"How you connect affordable housing opportunities (with tourism marketing), and how you put municipalities or communities in positions like this, I just think is unconscionable."

In a broader sense, it's the finer economic details that have Sturdy concerned.

"When you combine the fact that we have no revenues coming in for the Port Mann (Bridge), and now the Golden Ears Bridge is also going to come into provincial inventory as a provincial asset and a provincial debt, we've essentially added in the neighbourhood of $6 billion to the provincial debt, like that," Sturdy said, snapping his fingers.

"Have we got anything for it? I think you could argue no, we haven't. So things like that are concerning to me, certainly."

THE VIEW FROM WHISTLER

From Mayor Nancy Wilhelm-Morden's perspective, there are a lot of interesting items in the budget.

"The first thing would be the $1 billion invested in childcare. That has been an issue that is of concern to both our community and to our council, and it is long overdue, so very happy to see that," Wilhelm-Morden said.

Also of interest are commitments to wildfire preparedness funding ($50 million over three years for "improving wildfire resiliency") and housing (with a new 30-point plan for affordable housing), but the Resort Municipality of Whistler (RMOW) is waiting to hear more details on both fronts.

"We knew that they were going to address the housing and affordability, but making a fairly significant change to the use of MRDT is interesting, and we're going to have to have a careful look at that," Wilhelm-Morden said.

The RMOW has applied for an increase to its MRDT rate (from two per cent to three per cent), which includes a contract with Tourism Whistler about how the additional one per cent of revenue will be used, Wilhelm-Morden said.

"What the province is thinking about doing as expressed in the budget puts a bit of a wrinkle in all of that, so certainly we are going to have to look at the legislation when it comes, carefully, to figure out just what can we do," she said.

THE IMPACT ON TOURISM

On the tourism side of things, there are a few "moving parts" within the budget being looked at, said Walt Judas, CEO of the Tourism Association of BC (TIABC).

Things like $51.5 million (an increase of $500,000) for Destination BC's marketing efforts, highway improvements, freezing of BC Ferries rates, and a commitment to new campsites are all positives, Judas said.

But the lack of a formula-based funding model for Destination BC, and the changing regulations for MRDT spending are concerning for the overall health of tourism in the province.

"The affordable-housing component that the government wants to undertake, nobody takes an issue with, because communities around the province need more affordable housing to attract workers and obviously to house residents," Judas said.

"But it's where it's being considered is where we need to spend some time in figuring out what that looks like."

The concern is that if MRDT revenues are directed to housing instead of tourism marketing, the momentum built in recent years (and some recent record-setting results) will be lost.

But like Sturdy and the RMOW, Judas and TIABC are waiting on more information and clarity around the MRDT announcement.

MSP AND THE COST TO BUSINESS

Meanwhile, B.C.'s business community is unimpressed with the government's plan to eliminate Medical Service Plan (MSP) premiums by instituting a new payroll tax for businesses with a payroll over $500,000.

Under the new plan, businesses with a payroll of more than $1.5 million will pay a rate of 1.95 per cent on their total payroll, while those with a payroll between $500,000 and $1.5 million will pay a reduced rate.

The budget's investments in housing and childcare are much needed, said Val Litwin, CEO of the BC Chamber of Commerce, but the new tax is less than encouraging.

"We're not stuck in the dark ages. We get that we benefit from healthy employees, so we would expect to pay some of it, but business is being told to pick up the tab to the tune of almost $2 billion now," Litwin said.

Along with the increasing corporate tax, rising minimum wage and carbon tax, the new payroll tax is tough to swallow, Litwin said.

"When you take them all as a whole, it is too much for business," he said.

"I think an economist would be able to tell you that it's lower taxes and a freer market that will allow a business to grow to invest to make that next hire, and what we're certainly starting to hear from members now is that this will give them pause, this may slow down growth, this may even prevent them from growing."

Melissa Pace, CEO of the Whistler Chamber of Commerce, said the organization is putting out all the information it can to members.

"I would encourage members to read it and to understand it, and if they don't understand it to give us a call at the Chamber," she said.

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