February 22, 2024 -- Today, the new 2024-25 provincial budget was released by Finance Minister Katrine Conroy in Victoria.  The Langley Chamber attended the budget lock-up in Victoria in person, getting first look at the budget to bring information and explanations on the budget and the government’s goals and priorities directly to our members.

Below, read the Langley Chamber’s initial review of the key announcements in the 2023/24 budget, and what this budget means for you.    

The Langley Chamber is pleased to see bottom-line cost savings for businesses, including a long-sought cut to the Employer Health Tax and a new BC Electricity Affordability Credit.  The Langley Chamber has been pushing for lower costs to businesses and this provides some level of savings for our members.

The budget does contain significant deficits for the current year and throughout the 3-year plan, which is concerning. As noted by the government itself, lower revenue from corporate taxes is a contributor to the current deficit, highlighting the importance of the business sector to powering (and funding) the provincial budget.

The Langley Chamber will continue to work with our provincial representatives and various ministries to help shape how the government’s programs are implemented, and to advocate for further action, investment and changes where needed to ensure Langley businesses can thrive and be successful, and to support economic growth.

Budget Balance and Debt

The $89 billion budget includes a $7.9 billion deficit for the coming 2024/25 year, with operating deficits totaling $21.8 billion forecast over the 3-year plan.  The government is also now expecting to end the current 2023/24 year with a deficit of $5.9 billion, $357 million more than expected.  

For context, these deficits are the larger than experienced even during the COVID-19 pandemic.  These deficits are concerning, especially those for 2025 and 2026, given they occur despite forecasted economic growth of 2.3% and 2.4%. If the economy performs worse than expected, these deficits could increase significantly.   

As a result, BC’s debt is set to increase from $71 billion to $126 billion by 2026/27, and the debt-to-GDP ratio is also going to increase from 17.6% this year to 27.5% in 2026/27.  The cost to service this debt represents 3.2 cents of every tax dollar.

Employer Health Tax Reduction

In a major win for the Langley Chamber, the exemption threshold for the Employer Health Tax is being increased to $1,000,000 effective January 1, 2024.   For the past 5 years, the Langley Chamber has been a leading voice in pushing against this new tax on employers, and we are pleased to finally see action taken.

This cut will save small businesses up to $14,628 a year, and will exempt 90% of businesses from the tax entirely.  Businesses with payroll between $1 million and $1.5 million will also see savings as a result.  

The EHT is a payroll tax that costs businesses on every dollar of payroll over $500,000.  For years, the Langley Chamber has strongly advocated against the EHT, and in particular, during the recent period of wage inflation we said the time was right for the exemption to be increased. 

We applaud this measure as a tangible, bottom-line cost saving to businesses.  But there is more work to do to bring savings to businesses with over $1.5 million in payroll, as they are unaffected by this change. 

Electricity Savings for Business

Another new savings for businesses will be a one-time, year-long BC Electricity Affordability Credit that will save businesses 4.6% on their bills, totalling $400 in savings for the average small business.  The Langley Chamber met with the leadership of BC Hydro on this issue and can report that industrial and commercial customers will see savings equal to approximately 4.6% of their 2023 hydro consumption applied as a credit to their 2024 bills.   For the average small business, this will mean savings of $400 this year, but larger businesses/electrical consumers will realized greater savings. 

This credit will also apply to residential users and will average $100 in savings for those BC Hydro customers.

Infrastructure

In Budget 2024, taxpayer-supported capital spending over the next three years is planned at $43.3 billion in spending on schools, hospitals, roads, bridges, and other infrastructure.  

Importantly for Langley, this includes over $2.6 billion for Highway 1 improvements which the Langley Chamber has pushed for and met regularly with the Project Team to advance.   This includes a new 264th Interchange, a reconfigured 232 interchange, improvements to the Mount Lehman Crossing, replacement of the Bradner Overpass and over 20 kilometers of widening and new HOV lanes. As well, the Budget contains the $4.0 billion to construct the Surrey Langley SkyTrain project to Langley.

Housing

A new tax on house flipping will take effect January 1, 2025, which will tax 20% of the proceeds of the sale of residential properties sold within 365 days of purchase, and will decline to up to 730 days, with no tax if the property is held for at least 2 years.  This will have exceptions for life events (death, divorce, etc) causing the sale.

The Budget includes $198 million in operating and capital funding for BC Builds, the new provincial program designed to help build more rental homes for middle-income individuals, a sector of the population the Langley Chamber has noted often are excluded from programs.

Health Care and Mental Health

The Budget contains $215 million in continued funding for mental health, addictions and treatment, including $117 million in funding for 2,200 community mental health and substance use treatment beds previously announced.  While the Langley Chamber welcomes this funding we note that it does not provide net new treatment capacity, which we continue to advocate for as better access to treatment is key to address the in-community effects of addiction and mental health often experienced by our business community.  

Budget 2024 also provides $354 million for home health-care services for seniors, and $127 million for community-based services to support seniors with day-to-say tasks in an effort to keep them living at home longer.

Starting April 1, 2025, B.C. will launch the new publicly funded IVF program to help with the costs of treatment and medication for a single cycle of treatment.

Carbon Tax

Carbon tax will increase to $80/ton on April 1st,  which amounts to 17.61¢ per litre, raising $2.5 billion in revenue. This is in alignment with federal requirements of $15/ton increases each year.  The BC government has committed to returning revenue from these specific increases to residents through the Climate Action Tax Credit, bringing back some level of revenue-neutrality which the Langley Chamber supports over applying the carbon tax dollars to general revenue.

Other Key Measures:

A new BC Family Benefit Bonus will temporarily increase the BC Family Benefit for 2024/25 with payments beginning July 2024, with the average benefit being $445 more for BC families.

The Budget provides $228 million over three years to sustain Future Ready initiatives, which include the $3,500 Future Skills Grant to help individuals get new training and upskilling.

$968 million is being added to the K-12 education for more teachers as well as classroom support staff.

$234 million in new funding over two years for priority infrastructure projects and programming to decrease flood risks in the Lower Mainland and improve the Province’s ability to manage water resources.
 

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