“Keep every promise you make, and only make promises you can keep” – Anthony Hitt

 2019 B.C. Provincial Budget Announced

The B.C. New Democrats released their second provincial budget this week. While the budget mostly stuck to the script, there were a few surprises. Here are some key takeaways:

The B.C. Child Opportunity Benefit. A major addition to help lower-income families, this new benefit will replace the Early Childhood Tax Benefit and offers lower-income families a substantial increase in both monthly benefits and eligibility. The COB will cover all children under the age of 18, while the ECTB ended once a child turned six.

A family with income below $25,000 per year will receive a refundable tax credit of $1,600 for the first child, $1,000 for the second child, and $800 for each subsequent child.

The amount of the benefit will scale down as income scales up. Families with one child will receive no benefit at an income level of $97,500, while families with two children will receive no benefit at the $114,500 income level.

In order to align with the federal tax code, this benefit will take effect and can be applied for starting October 2020.

No Daycare. A key platform promise was to introduce universal, $10-a-day child-care. While the 2019 budget mentions last year’s commitment of $1 Billion to create child-care spaces and reduce daycare costs over three years, it did not address the universal child-care promise.

Interest-Free Student Loans. The provincial portion of student loans will be interest-free, effective immediately. This covers existing, current student loans as well as new loans going forward.

Disability & Income Assistance Rate Increases. People receiving income assistance or disability assistance will get $50 more each month, starting in April 2019. Last year, the NDP budget increased these payments by $100 per month.

A single, employable person on income assistance will now be eligible for $760 per month, while a person with disabilities will now receive $1,183 per month.

Health Care. An expansion of the pharmacare program with additional $42 Million in funding. This will cover more drugs, including diabetes, asthma and hypertension medicines.

$30 Million in additional funding to combat the drug overdose issue.

Mental Health programs targeting the prevention and early intervention of mental health issues in children, youth, and young adults, in amount of $74 Million.

Medical Services Plan (MSP) premiums will be fully eliminated as of January 1, 2020, saving families up to $1,800 per year.

Housing. The NDP announced a budget for 200 extra temporary modular housing units, plus a new $10 Million rent bank – through Ministry of Social Development – to assist renters who need short-term help to stay housed. The rent bank has been a key recommendation of the 2018 Rental Housing Task Force (one of 23 such recommendations).

There was no progress of the NDP’s promise of a $400 annual renters’ rebate, but Finance Minister Carole James stated that work on this front is ongoing.

Clean B.C. Rebate. $900 Million committed over the next three years to fund rebates and incentives in the Clean B.C. program.

Included: Rebate of up to $6,000 on new zero-emission vehicles, $14,000 for home improvements to improve energy efficiency, and $700 for high-efficiency natural gas furnaces.

The Clean B.C. goal is to reduce provincial greenhouse gas emissions by 40 percent below the 2007 level by the year 2030, as part of an overall strategy to combat climate change.

ICBC Presents Risk. The Crown corporation suffered significant losses in multiple recent quarters, and the insurer has been flagged as a risk going forward, especially if the situation doesn’t improve.

Markets Continue Steady Ascent

Since the end of 2018, markets have rebounded significantly, to the point that your December 31 2018 year-end statements are now quite outdated.

The Toronto S&P/TSX Composite continued its rise this week, closing out north of the 16,000 mark for the first time since last October, settling at 16,013.01. The TSX has now spiked 16.2 percent since the Christmas Eve trough.

The S&P 500 flirted with the 2,800 mark, settling at 2,792.67. The S&P is now up 18.8 percent since Christmas Eve.

The Dow Jones Industrial Average breached the 26,000 mark for the first time since last November, closing Friday at 26,031.81, good for a rebound of 19.5 percent since Christmas Eve.

The NASDAQ closed at 7,527.54, good for another weekly gain. More importantly, since Christmas Eve, the NASDAQ has rebounded 21.6 percent.

Across the pond in Europe, the FTSE 100, the United Kingdom’s main index, has risen from its December 27, 2018 trough of 6,584.70 to close out Friday at 7,178.60, a 9 percent increase. While the FTSE has not rebounded from its trough to the same extent as the North American markets have, it is facing significant headwinds due to ongoing Brexit uncertainty.

This uncertainty is not expected to dissipate prior to March 29th at 11pm GST. At 11pm on March 29th, the UK will officially be out of the European Union, unless either the UK cancels their withdrawal (highly unlikely at this stage), or all 28 EU members agree to an extension.

RRSP Deadline is March 1, 2019

One final reminder that we are only one week away from the 2018 RRSP Deadline. As we approach the March 1st deadline, we encourage you to contact us with any questions about your RRSP. We can work with you to determine your estimated tax saving on a last-minute contribution.

Contact our office if you have any questions about your portfolio, or to contribute to your RRSP prior to the deadline.


Sources: The Globe and Mail, CBC.ca, theprovince.com

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.