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

Revelstoke cadets host 67th annual Ceremonial Review

Revelstoke’s 2458 Rocky Mountain Ranger Army Cadets hosted their 67th annual Ceremonial… Continue reading

Construction and wildfires in the area

Forecast from Environment Canada: Today: A few showers ending this morning then… Continue reading

Revelstoke artist receives second place in Kelowna juried art show

Danielle Hebert Special to the Review Revelstoke artist Peter Blackmore has been… Continue reading

Revelstoke city staff hope to create neighbourhood plan for Johnson Heights

There have been several development applications for the area

Jocelyn’s Jottings: Making an impact-collectively

Last week, I participated in the Collective Impact session hosted by the… Continue reading

‘This is unbelievable:’ Raptors dazzled by massive crowds at downtown Toronto parade

Mayor John Tory declares it ‘We The North Day’ after team’s historic NBA title win

North Okanagan adds wildfire protection

“The important message we would like to get out is that there are actions that people can take to make their homes less susceptible to the threat of wildfires”

Elusive ‘ghost whale’ surfaces near Campbell River

Ecotourism operator captures images of the rare white orca

Dangerous driving in Keremeos and Vernon nets jail time

Gary Patrick Richard will serve 73 days in jail for dangerous driving and other offences

Oil and gas sector cautious as deadline on Trans Mountain decision nears

Trudeau government expected to announce whether it will approve pipeline for second time on Tuesday

Skipping school costs a dozen B.C. students chance at a new car

Cowichan’s Jared Lammi showed up and won $5,000 cheque toward vehicle, but he can’t drive

Portion of Okanagan highway closed due to vehicle incident

Accident happened on Highway 6 a few kilometres east of the Village of Lumby; detour in effect

More student housing for UBC Okangan

B.C. government to build $25-million, on-campus building to address high demand, low vacancy rate

People throwing food at a bear in Fernie alarms conservation groups

“Approaching and feeding bears contributes to habituation,” says conservation group

Most Read