VICTORIA - Highlights of the British Columbia budget presented Tuesday:
Carbon Tax:
- Beginning July 1, 2008, British Columbia will begin phasing in a carbon tax on all fossil fuels including gasoline, diesel, natural gas, coal, propane and home heating fuel.
- The rate starts at $10 per tonne of carbon-equivalent emissions and will rise by $5 per year for the next four years.
- As of July 1, there will be a 2.41-cent increase per litre in gasoline. By 2012, it will be 7.24 cents per litre.
- For diesel and home heating oil, it works out to 2.2 cents per litre, rising to 8.27 cents by 2012.
- The tax will generate about $1.85 billion over three years.
- Two thirds of the money raised in the first year will come from business.
- The tax is to be revenue neutral and none of the money raised through the carbon tax will go toward program spending.
- Legislation will require a plan to be tabled in the legislature each year showing how the carbon-tax revenue will be returned to businesses and individuals.
Tax cuts:
- Each adult and child in British Columbia will get a $100 rebate -- a so-called Climate Action Dividend -- in June aimed at helping people adopt greener lifestyles.
- Lower-income British Columbians will be eligible for a $100 payment per adult and a $30 payment per child as part of a Climate Action Credit. The money will be paid quarterly.
- The bottom two personal income tax rates will be reduced for all British Columbians, resulting in a tax cut of two per cent in 2008 and 5 per cent in 2009 on the first $70,000 in earnings.
- Effective July 1, 2008, the general corporate income tax rate will be reduced to 11 per cent from 12 per cent. By 2011, it will be reduced to 10 per cent.
- Effective July 1, 2008, the small business tax rate will be reduced to 3.5 per cent from 4.5 per cent, with further reductions planned to 2.5 per cent by 2011.
Spending:
- Health spending increases by $2.9 billion over three years.
- $144 million over three years in extra money will go to K-12 education.
- $104 million of extra funding will go to reduce homelessness over four years.
- An additional $78 million over four years to allow emergency shelters to stay open 24 hours a day.
Overall:
- Total government revenue is forecast at $38.5 billion in 2008-2009
- Total government expense is forecast at $37.7 billion in 2008-2009
- The budget includes a $375 million contingency fund for emergencies and a $750 forecast allowance.
- The surplus is projected to be $50 million.
- The surplus for the last budget year was $2 billion.
