VICTORIA – British Columbia will table a budget Tuesday that aims to coax first-time home buyers into a red hot real estate market and includes the first payment on a promised prosperity fund linked to a liquefied natural gas industry that is currently more plan than reality.
Finance Minister Mike de Jong offered those glimpses of his budget Monday at a shoe repair shop in Victoria where he picked up a well-worn pair of black leather shoes that he had shined and resoled to wear when he tables the budget.
The budget will tackle housing on a number of fronts, he said, including soaring prices in Metro Vancouver, affordability for first-time buyers and stimulating home building to keep prices in check.
“My belief, and the government’s belief, is there are two parts to the equation,” he said. “One is doing what we can to facilitate people entering the housing market. That’s the demand side.”
The second part involves increasing housing supply, said de Jong.
“We’re also looking to take steps that will encourage … an increase in the supply of housing options for British Columbians,” he said.
The Liberal government’s recent throne speech said there is no single solution to cooling the hot housing market while protecting homeowner equity.
The government has signalled it is examining ways of cutting the amount of property transfer tax paid by first-time buyers, and it has announced plans to work with municipalities to reduce development and permit costs that add to housing prices.
Premier Christy Clark announced the prosperity fund three years ago using revenues from the LNG industry, saying the fund could reach $100 billion and pay down the provincial debt, which stands at about $65 billion.
Royal Dutch Shell recently delayed its final investment decision to build an LNG export facility in northwest B.C. near Kitimat until the end of this year. A proposed $36 billion LNG facility near Prince Rupert, backed by Malaysian state-owned energy giant Petronas, is awaiting federal approvals before the final green light decision is made.
De Jong sounded positive about the industry’s prospects on Monday.
“No one is being shy about the fact the final investment decisions we are looking for haven’t yet occurred,” he said. “We’re still confident it’s a question of when, not if.”
NDP finance critic Carole James said de Jong is trying to sell the “premier’s political fantasy fund. What you’ve tapped into is taxpayers’s pockets,” she said. “There is no money coming from an industry that has yet to materialize.”
James said the government should use last year’s project $265 million budget surplus to help British Columbians facing higher medical service premiums and hydro costs.
Clark has said tweaks to medical premiums and more cash for social service programs are part of the budget. She has rejected NDP and Green party calls to overhaul or eliminate the medical premium program.
B.C. Hydro rates jumped four per cent last month and the Canadian Taxpayers Federation says medical premium rates have increased 39 per cent since 2009, from $108 a month for a family with children to $150 per month now.
De Jong said the medical premium payments, which collect more than $2 billion annually, account for about 14 per cent of B.C.’s health budget of almost $19 billion.
He has said the government is looking at being more flexible with medical premiums but rejected calls to make the payments part of the income tax system.