VANCOUVER, Sept 11 (Reuters) - British Columbia's New Democratic government said on Monday it would increase the Western Canadian province's carbon tax rate by C$5 a tonne from April 1, 2018, and also raised the provincial corporate tax rate and taxes on higher earners.
Unveiling an update to a February provincial budget drafted by the then right-of-center Liberal government, NDP Finance Minister Carole James forecast a budget surplus of C$246 million ($203.27 million) for the 2017-2018 fiscal year, and surpluses until at least 2020.
Provincial real GDP growth was estimated at 2.9 percent for this year, up from the 2.1 percent forecast in February.
The NDP government, which took office in July with the backing of the Green Party, said it would increase the carbon tax rate by C$5 a tonne to C$35 a tonne next April to help reduce carbon pollution. It will also use carbon tax revenues to fund "green" initiatives.
The government also made good on several of its campaign promises to improve affordability in the province, setting aside funds for new rental housing units and housing for the homeless, while cutting medical services premiums by 50 percent.
"Less than eight weeks after forming government, we have taken the first steps to invest in the people of B.C. with this budget update," James said in a statement.
The NDP also raised the corporate income tax rate to 12 percent from 11 percent, and increased the provincial personal income tax rate to 16.8 percent on taxable income over C$150,000, from 14.7 percent.
The NDP and the Greens defeated the provincial Liberals in a non-confidence vote on June 29 after a knife-edge election earlier this year that saw the Liberals lose their parliamentary majority after 16 years in power. = 1.2102 Canadian dollars)