B.C. deficit jumps after HST defeat

The defeat of the harmonized sales tax has nearly tripled B.C.'s deficit forecast for the current fiscal year, doubled it for next year, and left a $458 million gap for 2013 when the B.C. Liberal government has committed to balance the budget and call an election.

Finance Minister Kevin Falcon says the government will find a way to bring B.C.'s budget out of the red by 2013.

VICTORIA – The defeat of the harmonized sales tax has nearly tripled B.C.’s deficit forecast for the current fiscal year, doubled it for next year, and left a $458 million gap for 2013 when the B.C. Liberal government has committed to balance the budget and call an election.

Finance Minister Kevin Falcon revealed the latest projections in the province’s first quarter economic update Thursday. The ministry calculates that scrapping the HST will cost the provincial treasury $2.2 billion over three years, including $700 million less revenue once the old provincial sales tax is reinstated. Further revenue reductions are expected in later years before economic growth makes up the sales tax revenue.

Falcon said he will be traveling the province this fall for the annual budget consultation, but he has already heard that the public has little appetite for new tax or fee increases to make up for undoing the HST.

He said the cabinet has not yet decided if the “net zero” mandate for public sector union negotiations will be extended after it expires this December. But he gave a strong hint to the B.C. Teachers’ Federation and the B.C. Government and Service Employees’ Union, the two largest groups that have not yet agreed to contracts under those conditions.

“I’m not looking at any kind of a rollback in wages,” Falcon said. “I think all we’re saying is that the public sector needs to recognize that in the world we’re in now, this isn’t a good time to be asking for significant increases.”

NDP finance critic Bruce Ralston refused to comment on whether teachers or other government workers should get raises, after his party helped in the two-year effort to repeal the HST. He said if lower-paid public employees have to sacrifice for Falcon’s cost-cutting exercise, executives in government and Crown corporations should also share the pain.

The finance ministry now expects the deficit for 2011-12 to be $2.3 billion, up from $925 million in the spring budget. That is mainly due to borrowing to repay the federal government’s $1.6 billion HST transition fund.

The deficit for 2012-13 is doubled to $805 million, and another $458 million must be made up through cost reductions or extra revenue for the government to balance the books for 2013-14.

The HST reversal means the province’s total debt is expected to reach $62.3 billion in the next three years.

Just Posted

Historic Hornsby Crawler housing at hand

Construction for Hornsby Crawler structure approved by RDMW

Port McNeill Kids in Motion granted swimming funds from the town

Kids in Motion were granted $300 from the town to help cover costs for using the pool this summer.

Seven Hills seeks funding for power poles

Golf and Country Club requests $40,000 advance from RDMW

Editorial: Things are about to look a little different around here

Starting August 1, 2018, the North Island Gazette is going to have a fresh new look.

Long receives Highest Academic Achievement Award

RDMW staffer commended for his achievements in Local Government Administration Program

BC Games: Dance, spoken-word highlights at Opening Ceremony in Cowichan

Hundreds of athletes and thousands of volunteers, coaches, parents and officials

Police to provide update on case against alleged serial killer Bruce McArthur

McArthur worked as a landscaper, allegedly concealed the remains of seven men in planters

Premiers to wrap up 2 days of meetings at New Brunswick seaside resort

Meetings held in the scenic seaside town of St. Andrews on Thursday focused on trade

B.C. city wants pot punted from farmland

Concerned about conversion from growing food to making marijuana

World’s translators push back on forcing Trump interpreter to testify

Democrats had asked translator to testify about Trump’s lengthy conversation with Putin in Helsinki

No decision on B.C. school stabbing suspect’s mental fitness for trial

The BC Review Board could not determine whether Gabriel Klein, 21, is fit to stand trial

Port McNeill council donates boat pass to Tour de Rock rider

“The pool passes are nice, but I think our boat passes would go for quite a bit more money.”

Canadian government threatens to retaliate if Trump imposes auto tariffs

U.S president had suggested that auto imports pose a national security risk to the U.S.

Wildfire evacuation order forces bride to search for new wedding venue

Fitzpatrick Family Vineyards is under an order due to the Mount Eneas wildfire south of Peachland

Most Read