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NEWS |
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| ELECTORNIC EDITION |
| 2007-03-19 |
| ·WEST ·EAST |
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GLOBAL CHINESE PRESS |
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B.C. wins, loses in federal budget
By PETER O’NEIL 2007-03-19 14:17 Sun Ottawa Bureau | OTTAWA -- B.C. got a financial boost for the Asia-Pacific Gateway infrastructure initiative in today’s federal budget but suffered a potentially damaging long-term setback under a new formula for the equalization program that funnels billions to Quebec and other poorer provinces.
The Conservative government’s second budget also announced a get-tough National Drug Strategy that provides $64 million in new money but provides no funds for “harm reduction” initiatives like needle exchanges and Vancouver’s pilot supervised injection site for drug addicts.
Finance Minister Jim Flaherty’s second budget topped up last year’s $591 million commitment to improving road and rail access to key West Coast transportation hubs with an additional $410 million, spread over eight years.
 Finance Minister Jim Flaherty / by Canadian Press
The budget presented mixed blessings for B.C. Premier Gordon Campbell.
While the extra Gateway money will be appreciated, Campbell has also argued loudly against today’s proposed change in the new formula for the equalization program that sends federal tax dollars to every province in recent years except Ontario and Alberta.
Campbell objected to a 2006 expert panel’s proposal calling for inclusion of B.C.’s sky-high property values in the formula, a move that the panel acknowledged would help Quebec and hurt B.C.
The B.C. government, which stops receiving equalization this year due to a surging economy, won’t likely ever be eligible to receive payments again under that program even if the economy slumps, Campbell and Finance Minister Carole Taylor have warned.
But Flaherty went ahead and instituted the new formula anyway to determine each province’s “fiscal capacity” to raise taxes.
The new formula will result in Quebec’s allotment going from $5.5 billion this year to $7.6 billion in 2008-09.
“Of all the changes to the measurement of fiscal capacity, the single largest impact stems from the move to a new residential property tax base based on market value,” the budget notes.
“Nowhere is this more important than in British Columbia, which has seen significant increases in housing prices.”
In recognition of B.C.’s setback, the budget will provide “additional protection” to the province by maintaining the old formula, which discounted property values, for a three-year transition period.
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