Balanced Budget 2005 shows what we can accomplish — as a province and a people — and it points the way to a future of growth, confidence and prosperity.

In just three years, as a province, we have rebuilt our economy, revitalized our industries, and regained our role as a national leader. We have brought back investment, created hundreds of thousands of jobs, strengthened our communities, and won the right — in 2010 — to host the world's most prestigious cultural and sporting event.

Our province is now moving towards a golden decade and Balanced Budget 2005 will help ensure all British Columbians share in the opportunities ahead with:

• long-term investments in our environment, and our communities;
• new measures to strengthen the economy;
• new supports for children with special needs and people with disabilities;
• thousands of new post-secondary spaces;
• the highest budgets ever for health care and education;
• the largest ever annual reduction in provincial debt; and
• income tax and MSP premium changes that, over three years, will leave $480 million in the pockets of those who need it most.

Sound Fiscal Management and Sustainable Future

Near Record Surplus and Balanced Budgets

The revised surplus forecast for the current fiscal year is $1.4 billion, with a forecast allowance of $300 million, which, if not required, will result in a record surplus.

Balanced Budget 2005 forecasts surpluses of $220 million in 2005/06 and $200 million in each of 2006/07 and 2007/08. Forecast allowances and contingencies will protect the balanced budget projections against unforeseen events and revenue risks.

Record $1.7 Billion Debt Paydown

Total provincial debt at the end of 2004/05 is forecast at $36.1 billion, a $1.7 billion decline from the previous year and the largest annual debt reduction in B.C. history.

Balanced Budget 2005 includes a capital plan for ministries and taxpayer-supported agencies that is substantially higher in value than last year's plan. It includes an additional $1 billion in 2005/06 and $900 million in 2006/07 for planned and new construction of schools, colleges and universities, health facilities and transportation infrastructure.

More Services for British Columbians

Balanced Budget 2005 provides $6.5 billion over the next three years for increased ministry funding for health care, communities, children, education, public safety, economic development and the environment. Reflecting the ongoing service priorities of British Columbians, 71 per cent of the new funding is directed to health care and education.

British Columbia: The best place on Earth
to live, work, and raise a family

Balanced Budget 2005 supports tax reductions for lower and moderate income British Columbians, measures to keep home ownership affordable, and increased funding to keep our families safe and strengthen our local communities.

In 2001, the government reduced income taxes for B.C. families by an average of 25 per cent, and by 28 per cent for those earning less than $30,000 a year. With higher revenues fuelled by a stronger economy, the province is in a position to reduce taxes further.

The BC Tax Reduction

Effective this year, a new non-refundable personal income tax credit, the BC Tax Reduction, will reduce or eliminate provincial income taxes for about 730,000 British Columbians. Most individuals earning up to $16,000 a year will pay no provincial income tax and those earning up to $26,000 will pay lower tax.

Improved MSP Premium Assistance Program

A $4,000 increase in the threshold to qualify for the Medical Services Plan Premium Assistance Program will reduce or eliminate premiums for 215,000 people. This means:

• Single persons with net incomes of $20,000 or less will pay no premiums, and those earning up to $28,000 will pay lower premiums.
• Senior couples and families of four with net incomes of $29,000 or less will pay no premiums, and those with net incomes up to $37,000 will pay lower premiums.

Over the next three years, the BC Tax Reduction and the enhanced MSP Premium Assistance Program will provide $480 million in tax reductions for lower and moderate income families, seniors, and individuals.

Examples of Tax Savings

A senior couple with an income of $30,000 will now pay almost $930 less in total provincial tax than in 2001.

A family of four earning $30,000 will now pay almost $1,300 less in total provincial tax than in 2001.

Other Tax Reductions

Balanced Budget 2005 supports other tax reductions including:

• improvements to the First-Time Homebuyers Program, which exempts first time buyers from the property transfer tax on eligible residential properties;
• an increase to the vehicle surtax thresholds by $2,000 to eliminate the surtax on passenger vehicles valued below $49,000;
• other previously announced measures such as the reduction of the PST rate to 7 per cent from 7.5 per cent, increased film and television tax credits, and an improved threshold and phase-out rate for the Home Owner Grant Program.

Community Infrastructure and Safety

Balanced Budget 2005 provides additional funding for community infrastructure and safety, including:

• $207 million for municipal and regional infrastructure across B.C.;
• $95 million to return traffic fine revenues to 70 municipalities for community policing, crime prevention, and other initiatives to make communities safer; and
• $122 million to add 215 RCMP officers throughout B.C. and increase support for provincial courts and corrections.

Through Balanced Budget 2005, the province will have funded $328 million of its $600 million commitment to the 2010 Olympic and Paralympic Games by 2007/08.

Great Goals for a Golden Decade

Balanced Budget 2005 supports the government's over-arching objective to help British Columbia realize its full potential as the best place on Earth to raise a family; to live and play; to work, invest and get ahead.

To guide its progress, the government has identified five great goals for the decade ahead.

1. To make B.C. the best educated, most literate jurisdiction on the continent.
2. To lead the way in North America in healthy living and physical fitness.
3. To build the best system of support in Canada for persons with disabilities, special needs, children at risk and seniors.
4. To lead the world in sustainable environmental management, with the best air and water quality and the best fisheries management, bar none.
5. To create more jobs per capita than anywhere else in Canada.

Balanced Budget 2005:

A healthy environment is critical to a healthy lifestyle. Balanced Budget 2005 provides an additional $150 million to preserve and protect our stunning natural surroundings that help define our province to the world.

These initiatives include:

• $91 million to remediate contaminated sites on Crown land;
• $5 million to increase the capacity of the Environmental Assessment Office;
• $16 million to establish the B.C. Conservation Corps, with up to 150 members, and the addition of up to 50 new park rangers and conservation officers.
• $30 million to support land-use planning activities; and
• $8 million to implement the Drinking Water Protection Act.

Balanced Budget 2005 also supports better protection for aquatic habitats with $6 million for fisheries inspection and monitoring and improvements in aquatic animal health.

British Columbians will benefit from safe, reliable and accessible drinking water and improved waste water systems with the creation of a new $80 million B.C. Community Water Improvement Program.

Tax changes to reduce greenhouse gas emissions

Balanced Budget 2005 encourages the development and use of cleaner, alternative energy sources with targeted tax changes that include:

• enhanced provincial sales tax (PST) relief for alternative fuel vehicles, including an exemption from provincial sales tax, up to a maximum of $2,000, for hybrid electric passenger vehicles (until March 31, 2008);
• a two-year PST exemption for energy efficient residential heating equipment; and
• a partial exemption from the property (school) tax for eligible hydroelectric projects.

Balanced Budget 2005:

Balanced Budget 2005 supports the highest education budget and highest per-pupil funding in British Columbia history. More students than ever are completing high school, and they are getting the best marks ever in reading, writing and math. As students graduate, they will be able to pursue a wider range of opportunities as the province delivers the largest expansion of post-secondary education in over 40 years.

Total education spending, including K-12, advanced education and skills training, continues to increase each year and will reach $9.8 billion in 2007/08. That represents a $2 billion increase in annual spending since 2000/01.

Education

Balanced Budget 2005 provides an additional $622 million to the Ministry of Education, which allows for a $150 million increase in funding for 2005/06 — the single largest funding increase in a decade. This funding will improve access to:

• school libraries and quality learning resources;
• music and arts programs;
• resources to support every special needs student; and
• a new school-based literacy innovation program.

Post-Secondary Education

British Columbia will add 25,000 new post-secondary spaces by 2010.

Balanced Budget 2005 provides an additional $372 million in funding for post-secondary education, including fully funding the province's share of costs for 16,205 seats up to 2007/08 with an overall goal to add 25,000 seats by 2010.

The province will provide $450 million for student financial assistance including loan reductions for students in need, debt relief, a loan forgiveness program and grants for students with disabilities.

Literacy and Arts

Balanced Budget 2005 provides $12 million to public libraries across B.C. for new programs and initiatives including broadband Internet access, a 24-hour virtual reference desk and a one-card system to provide access to books in any B.C. library.

In addition, the budget provides $25 million for the Arts and Culture Endowment Fund that will leverage private sector support to build endowments for arts and culture organizations. The BC Arts Council will also receive an additional $3 million annually.