Businesses respond to the B.C. Budget 2023

This week, the B.C. government unveiled its much-anticipated Budget 2023. The plan covers the key issues in the province, including health- and mental-health care, creating more affordable housing, growing a clean economy, and helping ease the costs to individuals from inflation. Local industry organizations, however, have given the document mixed reviews.

Future Ready plan

Of chief interest to the innovation community is the Future Ready plan. The initiative includes highlights such as creating a grant for short-term skills training so people can secure good-paying and high demand jobs, new funding to assist small and medium-sized businesses in finding practical solutions to current labour market challenges, fresh opportunities for Indigenous peoples, and creating thousands of new training seats for in-demand fields. The province has allocated $480 million over three years to achieve the goals set out in the plan, though the full details won’t be released until spring.

The Council of Canadian Innovators was largely happy with the scheme. “We were pleased to see that the B.C. government heard our members’ concerns about the skilled talent shortage, and they have earmarked significant funding for training and upskilling through the Future Ready Plan,” said Dana O’Born, vice-president of strategy and advocacy at the organization.

The Greater Vancouver Board of Trade, too, sees the initiative as vital to help solve the acute workforce challenges facing the province. “Our over 5,000 members are struggling to access the talent and the skills they need to grow their business,” said Bridgitte Anderson, president and CEO of the organization. “I am pleased with the investment in the Future Ready Plan and believe it will pay dividends if it is done in close collaboration with the business community.”

Attracting investment and procurement

Where the 2023 budget is lacking, according to various industry associations, is in providing direct opportunities for local businesses. Aside from the Future Ready plan and new funding assigned to the natural resource sector, the Greater Vancouver Board of Trade notes that there is little mention of small business, innovation, manufacturing, or business issues in general across the budget.

“Our members had hoped for measures to offset the rising costs of doing business but found no relief in Budget 2023,” said Anderson. “Unfortunately, the budget is essentially silent on an economic strategy to attract investment, and increase our innovation capacity and competitive advantage. With a slowing economy and a growing population, we need a strong private sector and competitive investment conditions to increase prosperity across the province.”

The Canadian Council of Innovators agrees. “We would have liked to see the B.C. government use the 2023 budget as an opportunity to embrace strategic procurement, with an emphasis on innovative solutions provided by local vendors,” said O’Born. “Digital services can improve government systems and drive efficiency, while also providing a major boost to local companies.”

BC Tech, however, pointed to the Ministry of Jobs, Economic Development, and Innovation Service Plan – a document from the department which supports the release of the Budget – as an indicator that the provincial government is still prioritizing small businesses. “It was great to see [...] the focus on growing businesses with 10 or more employees,” said a statement on the industry organization’s website. “Such companies can pay higher salaries, invest more in R&D, support a growing workforce, and generate more economic activity domestically and internationally. Supporting more small businesses to scale up and become economic anchors in communities, builds a resilient and diverse economy, and B.C. does not invest enough in this work today.”

Housing and social initiatives

Budget 2023 also included large investments in housing and social infrastructure: two major issues that local businesses say prohibit them from attracting and retaining talent.

Starting in 2024, moderate- and low-income renters will receive up to $400 with a new income-tested renter’s tax credit, which the province says will help more than 80 percent of B.C.’s renting households. The government announced that it’s streamlining the permitting process to make approvals easier, so construction on new homes for people can get underway faster. It’s also committed the biggest three-year investment in B.C. history to build new homes.

The province is also spending big on social initiatives, including committing $586 million to support people struggling with addiction; adding funding to help recruit and retain staff, redesign and rebalance workloads, and make health-care spaces more culturally safe; training more medical professionals; and recognizing medical credentials attained in foreign workers’ own countries.

Despite rating the overall budget as a C- average, the Greater Vancouver Board of Trade saw these initiatives as a positive step for the business community. “We are appreciative of the additional funding for health and mental health, given the significant impacts of the pandemic on British Columbians,” its statement reads. “In addition, investments that support a rapid response to encampments [are] well-received, alongside investments in public safety that strengthen enforcement and crime prevention.”

The B.C. chapter of the Canadian Union of Public Employees was largely enthusiastic about measures from free birth control to school lunch programs, but saw another gap. “Amid all the new investment in critical services, I was surprised that the budget was relatively silent on continued expansion of childcare spaces, and the provision of a much-needed public option,” said president Karen Ranalletta in a press release.

Creating a large deficit

Of chief concern to a number of local industry organizations is how much the Budget’s initiatives will cost.

The Greater Vancouver Board of Trade ran its official statement with the headline “B.C. budget spends big, leaves economy out.” It highlighted in a press release that the government is projecting deficits totalling more than $11 billion over the next three years, and the total debt is projected to significantly increase to $134.3 billion by the end of the fiscal plan. This represents an increase of 43 percent from 2022-23 to 2025-26, and the vast majority of this debt is taxpayer-supported.

“Finance Minister Katrine Conroy’s first spending plan emphasized investments in health care and housing, but it also included a significant deficit,” agreed the Canadian Council of Innovators’ O’Born. “To pay for the social programs we all value, the government needs to place a better emphasis on economic growth, and B.C.’s technology sector is poised to help drive that prosperity.”

The government’s take

Despite those mixed reviews from the business community, the B.C. government is confident that it’s allocating the necessary resources to the areas it believes residents need them most.

“B.C. is a great place to live, but people are facing real challenges – not only from global inflation and the pandemic, but from ongoing and systemic challenges,” said Conroy about the plan. “This year’s budget helps protect people who can’t afford today’s high prices and takes action on the issues people care about, like finding affordable housing and accessing health care.

“We know there are some economic headwinds ahead of us as the global economy shifts in response to the pandemic, the war in Ukraine, and rising costs,” she continued. “That’s not a signal for our government to pull back and cut services – it’s a signal that we need to keep making smart investments so that we can continue to be there for British Columbians and build the stronger, more secure future we all want.”