Families will Save on MSP Premiums Thanks to B.C. Budget

British Columbia’s budget was announced on Tuesday afternoon.

Finance Minister Michael De Jong said the fourth consecutive balanced budget will invest $1.6 billion on core services. New and increased investments in programs and services include:

1. $3.2 billion over three years to the Ministry of Health
2. $673 million to the Ministry of Children and Family Development to support children, families, and individuals in need. This will include $217 million to support vulnerable youth and families.
3. $143 million over three years to enhance the B.C. economy. This includes $75 million for the new Rural Dividend Program, which will help smaller communities grow.

De Jong also announced new changes to Medical Services Plan (MSP). Starting on January 1, 2017 low-income families, individuals, and seniors will see premiums and enhanced premium assistance. All children will be exempted from MSP, which will benefit nearly 70,000 single-parent families.

With children being free of MSP and expanding the premiums an additional 335,000 people will see lowered premiums and 45,000 more people will no longer have to pay MSP premiums at all.

A single parent with two children will be saving up to $1,200 a year and a senior couple earning up to $51,000 will qualify for premiums.

In 2017 when these changes come into effect nearly two million people will no longer pay any premiums at all.

When it comes to housing the budget introduced a new exemption from property transfer tax. Newly constructed homes, including condominiums, priced up to $750,000 will be exempted from the property transfer tax.

“This exemption will save purchasers up to $13,000 on a newly constructed home and is estimated to provide approximately $75 million in property transfer tax relief for new construction in 2016-17. The cost of this measure will be offset by adding a third tier to the property transfer tax rate, increasing the rate to 3% from 2% on the fair market value of property above $2 million,” the budget explained.

Over the next five years the Government of B.C. will invest $355 million in capital funding. This will include the construction and renovation of affordable housing for those people with low to moderate incomes.

The B.C. Prosperity Fund has also been created. This fund will help eliminate the Province’s debt over time, invest in health care, education, transportation, and will help preserve a share of today’s prosperity for future British Columbians. De Jong announced that $100 million from the forecast 2015-2016 surplus will go to that fund.

A minimum of 50 per cent of the allocation will go towards debt retirement and 25 per cent will be saved to accumulate earnings.

Taxpayer-supported infrastructure will see $12 billion put into the economy over three years. This includes:

1. $3.1 billion in transportation, including highway upgrades and transit
2. $2.9 billion for health care projects including the new Centre for Mental Health and Addictions
3. $2.5 billion for post-secondary facilities
4. $1.7 billion to maintain, replace, renovate, and expand K-12 school facilities

By the end of the 2015-2016 direct operating debt will be reduced by $2.2 billion. With continued fiscal discipline De Jong said there’s an opportunity for B.C. to be free of operating debt by 2020.

“B.C. families know that working hard to pay off their credit card debt means they will save money on interest payments, and the same is true of government. A reduction in the operating debt means almost $500 million that would have gone to interest payments can instead be invested in priority programs for British Columbians,” De Jong said.

To read the full BC 2016 budget, click here.