B.C. Budget Stresses Natural Resources Use

B.C. Budget Stresses Natural Resources Use

A $6.15-billion spending program, reflecting a new intensity of concern for British Columbia's all-important natural resources, has been outlined by Finance Minister Hugh Curtis. 

Major initiatives include the start of a five-year, billion-dollar forest management program, a new $10-million energy development agency for future research and development and using the provincial sales tax as a carrot and stick for car buyers.

In future, buyers of fuel-efficient cars will pay a 2 per cent sales tax, down from the previous 4 per cent, but buyers of gas guzzlers will have to pay a stiffer 6 per cent. 

One of the surprises of the budget was the revelation that provincial revenues during the past year soared a whopping 20 per cent over last April's estimates - a happy embarrassment for any government. Most of the windfall $1-billion came from unexpectedly strong sales of forest products and higher prices and extra sales of natural gas. 

In general, the Social Credit ploy of underestimating revenues at budget time has produced surpluses of $900-million over the past four years and the surpluses have created a pool of cash to finance supplementary spending projects each year, such as the recent $200-million mortgage interest subsidy program. 

While Mr. Curtis' budget talks about a balance between budgetary revenues ($5.79-billion) and expenditures and statutory appropriations, it also draws an additional $353-million from the accumulated surplus account, which now holds $606-million, to pay for many of the new spending measures. The gas-guzzler tax was the only increase contained in the budget. 

British Columbia ranks itself with Saskatchewan and Alberta as provinces with the country's happiest balance sheets. 

Sharing what Mr. Curtis called the "blooming West" with such an affluent neighbor as Alberta means that British Columbia must try to keep a lid on its tax levels to remain competitive for industries and skilled labor. Borrowing an Alberta idea, Mr. Curtis revealed that he is considering creating a mini form of heritage trust fund for the West Coast to be called the Revenue Stabilization Fund. 

It would take the $253-million to be left in the surplus account and in future receive the entire $1.1-billion to be generated by B.C. natural resources. Resource revenues now are paid into consolidated revenue. 

Energy is a major natural resource sector to receive attention in the budget. Fuel-efficient cars (those burning 8.5 litres or less per 100 kilometres, mostly the popular subcompacts) get the carrot, while the guzzlers (those burning 13 litres or more per 100 kilometres, generally V-8-engine, full-size, luxury and sports cars) would get the stick. 

B.C. will also exempt from the 4 per cent provincial sales tax wood-burning and coal-burning stoves and furnaces, heat pumps, storm windows and doors, light and thermostat timers, propane converter kits for vehicles and solar heating equipment. 

The new energy development agency will co-ordinate and direct all government energy research and development, including the development of alternatives to gasoline. 

B.C., with an abundance of natural gas but declining oil reserves, will spend $1.5-million on an experiment to recover more oil from existing wells. 

The sales tax cuts will also be applied to oil, natural gas and electricity billings, a cut worth $15-million. 

A centrepiece of the budget was the attention to the forest industry, long clamoring for greater attention, particularly to reforestation, to maintain its place as the province's No. 1 provider. 

It appears that the forests will get an extra $206-million this year, including $50-million extra from stumpage revenue for reforestation and other forest management projects. A further $146-million will be placed in a new forest and range resource fund, $1.4-million of which will go to a forestry research laboratory previously cut adrift by federal cost-cutting. 

The $1.4-billion, five-year forestry program will be financed mostly through the regular ministry budget, with a total of $448-million from stumpage revenues and the rest from the new natural resource fund. 

To encourage greater processing of minerals in B.C., the Mining Tax Act will be changed to permit a processing allowance equal to 8 per cent of the original capital cost of processing assets, instead of the present allowance based only on undepreciated assets. 

The budget also provides: $30-million for the first-year costs of the promised provincial dental health plan; $55-million to help finance new urban transit systems; $70-million, mostly to service the debt on the troubled British Columbia Railway; An additional $25-million for a domed stadium in Vancouver and $15-million for a start on British Columbia Place on the Vancouver waterfront.