VICTORIA —  British Columbia served notice Tuesday it considers itself a Canadian powerhouse with grand plans to lead the country when it comes to improving housing, cutting taxes and cleaning up the environment.

The Liberal government, backed by a booming economy, will use its surplus billions to drive the most ambitious housing, taxation and environmental agendas in Canada, Finance Minister Carole Taylor said.

"This the best place on earth,'' said Taylor, trumpeting a Liberal government slogan and adding that her colleagues across Canada are "watching B.C. closely on a number of fronts.''

However, critics complain the details of the government's green agenda are still not clear and the housing plan and tax cuts mostly benefit better-off British Columbians.

Taylor's budget promises housing improvements worth $2 billion over four years for everybody from the homeless to homeowners.

Welfare rates will rise for the first time since 1992. The homeless will get 900 more shelter beds and B.C. taxpayers earning up to $108,000 a year get a 10 per cent personal income tax cut.  Taylor said the tax cut, coupled with the 25 per cent personal income tax cut introduced when the Liberals were first elected in 2001, means British Columbia has the lowest provincial income taxes in Canada, including Alberta.

But her budget drew immediate criticism from traditional Liberal adversaries in the labour movement who said the government should have raised welfare rates by 50 per cent and spent more money to house the poor rather than offer tax cuts to high-income earners.

Of the $2 billion to be spent on the housing plan, $1.5 billion will come from tax cuts after four years.

Accountants also had concerns about the budget, with the certified management accountants giving the government a B minus because of its "meagre'' funding for children, family and education programs.

The province's certified general accountants said they were concerned about the rising debt, which is forecast to rise from almost $37 billion to $40 billion by 2010.

The organization called on the government to use 50 per cent of its surplus for debt reduction.  "The debt is a millstone around the necks of British Columbians,'' said Gordon Clissold, president of the Certified General Accountants of B.C.

Taylor said the theme of the budget is housing, an issue that's come to symbolize the wide spectrum of British Columbia's economic value and needs.

Property values jumped 24 per cent on average across the province in 2006, but not everybody has capitalized on the housing and economic boom, she said.

"We have tried to look at every possible housing challenge,'' said Taylor.

The housing initiatives in the budget include:

• Adding 900 full-time shelter beds for people who are homeless or in danger of becoming homeless.
• Increasing shelter rates for people on welfare by $50 per month and raising the welfare rates another $50 for single parents and single employable people.
• Money for staffing transition houses on a 24 hour basis.
• Raising the threshold for first time home buyers to $375,000 and the homeowner grant threshold to $950,000 from $780,000.
• Setting aside $250 million from the surplus to establish a housing endowment fund to support innovative housing projects. 

"This is a $2 billion commitment to help the people of British Columbia meet their housing commitments, whatever their challenges,'' Taylor said.

Major funding of the government's green plan, highlighted in last week's throne speech, will come next year after a climate action team appointed by Premier Gordon Campbell develops the government's plan to reduce greenhouse gas emissions in British Columbia by one third by 2020, she said.

Environment initiatives in the budget include an extension of the $2,000 provincial sales tax break on the purchase of hybrid vehicles and a promise to spend $4 million to help form the premier's climate action team.

Environmental groups said the government has pledged to reduce greenhouse gases, but the budget indicates the government will continue to back projects in the oil, gas and transportation sectors that increase greenhouse gas emissions.

"There's some real inconsistencies between last week's visionary throne speech and this week's much less visionary budget when it comes to climate change,'' said Lisa Matthaus, Sierra Club of B.C. spokeswoman.

Taylor indicated the government is planning to introduce a surcharge on hydro rates this year as part of the government's energy plan. She did not say how much the surcharge will be.

The budget forecasts a $3.2 billion surplus for next year's budget and economic growth of 3.1 per cent. Economic growth was 3.9 per cent in 2006.