NEWS RELEASE: Economic Winter is Coming to B.C., but NDP Budget Ignores Warning Signs: ICBA
VICTORIA – As economic storm clouds gather on the horizon, the NDP Government’s 2019/20 B.C. Budget offers nothing to help construction and responsible resource development companies prepare for any looming downturn.
It also adds red tape and more costs for employers, ratchets up government spending, adds billions in debt, and fails to address B.C.’s startling lack of competitiveness with the U.S., Asia and other Canadian provinces.
“Around the world, prudent leaders are preparing for the next downturn as economic warning lights pop on,” said Jordan Bateman, ICBA’s VP-Communications. “But in B.C., the NDP Government thinks economic growth will continue on happily for at least the next three years –and are taxing, borrowing and spending like mad.”
Construction is the unsung hero of the B.C. economy, employing nearly 250,000 people and contributing almost 9 per cent of the provincial GDP – yet it was totally ignored in this budget.
Housing starts dropped 6.4 per cent in 2018 and are projected to drop another 16.7 per cent this year. In fact, under the NDP’s economic mismanagement, housing starts will fall almost one-third from 43,664 in 2017 to 30,517 in 2021. Yet, inexplicably, the NDP budget suggests that property transfer tax will somehow remain steady at $1.9 billion per year.
“Slowing housing starts means fewer jobs in construction, less PTT revenue, and one-third less supply to meet the demand for new homes,” said Bateman. “Instead of cutting red tape and trying to turbo charge housing starts to drive down costs, the NDP is quietly choking out the market.”
The BC Budget is also silent on the impact of the NDP’s sweetheart deal with the Building Trades Unions, which gives a monopoly on some large taxpayer-funded projects to just 15 per cent of the construction workforce. The Transportation Minister has previously said this monopoly will add at least 7 per cent to the cost of major construction projects; other estimates have been as high as 40 per cent.
“Instead of trying to stretch every taxpayer dollar as far as it can to get the best value, the NDP Government is continuing its terrible plan to feather their union buddies’ nests,” said Bateman. “This overspending on a few select projects means no budgeted money for replacing Massey Tunnel, no money for Surrey SkyTrain, and no money for Highway 1 expansion east of Langley.”
The provincial debt is projected to grow from $67.9 billion today to $82.4 billion in just three years. That works out to borrowing $400 million per month.
The budget also included a new level of red tape for mining projects, which will further choke investment in that sector. Billion dollar turnarounds are also predicted for both ICBC and BC Hydro, which could mean significant rate increases for both the public and employers.
“This budget re-announces a lot of last year’s measures and pre-announces a lot of next year’s, like changes to child tax credits,” said Bateman. “There was very little for today, and nothing to give the construction industry – which powers the B.C. economy – any comfort.”