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Rob Shaw: B.C. baffled by what the federal budget didn't address

Housing help was a big miss in Ottawa's spending spree
Finance Minister Katrine Conroy is disappointed that the federal government didn't provide more housing funds.

Premier David Eby’s government has taken every opportunity to alert the federal government to the importance of the province’s housing crisis. Eby told Prime Minister Justin Trudeau in a face-to-face meeting this month that prices remain out of reach for many (even with a cooling of the market due to interest rates) and monthly rents are reaching critically-unaffordable levels in this province.

So, there was much head-scratching by B.C. New Democrats at a federal budget on Tuesday that delivered, essentially, none of the things the province had suggested on housing.

There was no new money of substance from Ottawa. No commitment to federal land for housing, or partnerships in areas like unused military properties. No leadership whatsoever on any ambitious new program to get the feds back in the game on building affordable housing.

“I am disappointed there doesn’t seem to be funding for the housing that we have been asking for,” said Finance Minister Katrine Conroy.

“We need to be in a partnership with the federal government, municipal governments and our government to ensure that we have enough housing for people in this province.”

Instead of focusing on supply, Ottawa fiddled with financial aid, taxes and sales restrictions. It re-announced a $40,000 tax-free first home savings account to go alongside a one per cent tax on vacant foreign-owned properties, an anti-flipping tax and a $7,500 “multigenerational home renovation tax credit” to incentivize secondary suites for seniors.

The closest the feds got to construction money was $925 million in a “Housing Accelerator Fund.” But that’s for the entire country. B.C.’s share will be almost inconsequential, given the challenges the province is facing.

The situation was different, however, on Indigenous housing. The Trudeau government committed $4 billion to the Canada Mortgage and Housing Corporation to develop an Indigenous housing plan for the country’s urban, rural and northern nations — an area the federal government, not the provinces, should be stepping up on.

“We're the only province, I think, still, that is funding Indigenous housing, because we recognize how critically important it is,” said Conroy. “So really happy to see more funding for that.”

The federal budget did hit the mark on clean energy investment.

Premier Eby publicly called for action from Ottawa this month during a visit to Washington State, saying the $500 billion U.S. government Inflation Reduction Act’s heavy investment in clean energy posed a risk to jobs in British Columbia if it was not matched by Ottawa.

The Trudeau government, buoyed by a recent visit from U.S. President Joe Biden, went big in this area, with billions of dollars in new partnerships, incentives and tax breaks to spur development to ensure Canada won’t be left behind.

A critical item for B.C. was a 15 per cent investment tax credit for new electricity projects. It could be worth as much as $6 billion over four years, and is open to Crown electricity utilities like B.C. Hydro.

In the past, Hydro hasn’t been able to access federal tax credit programs because it doesn’t pay income tax. The change is good timing because Hydro is being pushed by Eby to build more transmission lines to north coast LNG plants, so his government can reduce emissions and help meet its climate targets.

“When we had our federal provincial territorial meeting, all of the ministers raised the concerns about that (Inflation Reduction) Act and how it was going to affect us as provinces, and our country,” said Conroy. “So we are glad to see it. That's good. We're happy to see the investment in the clean economy. It mirrors what we're doing here in B.C.”

There’s also $20 billion earmarked for new power generation in the Canada Infrastructure Bank, which offers low-interest financing, along with $3 billion for wind, smart grid and Indigenous partnership projects.

Hydro has never accessed the Canada Infrastructure Bank, instead borrowing money on its own. It now says it is willing to consider that new lending route going forward.

Another area the federal budget boosted B.C.’s efforts was in a 30-per-cent tax credit for investments and machinery in the mining of critical minerals used for electric vehicle batteries. Eby has publicly highlighted this as an area he intends to push on an upcoming trade mission to Asia, noting B.C. is well-positioned with several existing mines to help lead supply in the country.

“That's positive,” said Conroy. “It’s important to have those minerals. You want to have a clean economy, you need to invest in those minerals. We need them for our cameras, our phones, our bikes, and electric vehicles.”

The budget even provided a nod toward supporting hydrogen fuels, something pushed almost 20 years ago by former premier Gordon Campbell, which has now become a priority again under Eby.

Still, taken in its totality, there was an overall sense of disappointment from the B.C. government at the federal budget.

There was nothing towards the $4.5 billion Massey tunnel replacement, despite federal ministers indicating verbal support for the project earlier this year. Ottawa could always add the Massey to its capital plan later, but the failure to specifically earmark a federal share in the budget document has raised concerns in Victoria.

On healthcare, Ottawa delivered the bare minimum via its low-ball agreement with the provinces to increase federal health transfers. Team Trudeau billed it as historic. In reality, it means around $400 million for B.C. towards $31 billion on healthcare. It won’t accomplish anything of note, let alone begin to address the system’s many woes.

The Trudeau government seemed willing to spend big, ramping up the deficit to $40.1 billion this year. That’s a staggering figure when you consider it is equivalent to half of B.C.’s entire annual operating budget, for all its programs and services.

Yet, despite all the money, Ottawa still missed the mark in major areas.

B.C. government ministers must be wondering what else they can do to convince Ottawa to take action on key priorities for this province. The Eby government is speaking very clearly on what British Columbia needs. It’s just, the Trudeau government doesn’t appear to be listening.

Rob Shaw has spent more than 15 years covering B.C. politics, now reporting for CHEK News and writing for Glacier Media. He is the co-author of the national bestselling book A Matter of Confidence, host of the weekly podcast Political Capital, and a regular guest on CBC Radio.

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