Growth, HST help reduce B.C. deficit

The B.C. government finished the fiscal year this spring with a deficit of $309 million, nearly $1 billion less than what was forecast last fall.

Finance Minister Kevin Falcon describes B.C.'s improved economic performance in the fiscal year that ended March 31. B.C.'s four-per-cent growth was third after Newfoundland and Saskatchewan

VICTORIA – The B.C. government finished the fiscal year this spring with a deficit of $309 million, nearly $1 billion less than what was forecast last fall.

The savings came partly from extra tax revenues generated by four-per-cent economic growth during 2010-11, Finance Minister Kevin Falcon said Monday in releasing the province’s audited public accounts. Some was realized from lower than expected spending in programs such as health care, and some came from extra revenues collected through the harmonized sales tax.

But Falcon wasn’t able to say exactly how much extra revenue the HST brought in during its first year of operation. B.C. sales tax revenues are growing by about $600 million a year, partly due to the fact that provincial sales tax has been extended to a variety of services as well as goods.

But B.C.’s gross domestic product is growing faster than the national average and consumer confidence is strong, so revenues from the former PST would also have grown, Falcon said. And he noted it has been clear since the HST was introduced that it collects more revenue because of the broader tax base.

“It is also a tax that generates greater economic activity, generates more job creation, and that in turn will drive more revenues to the government,” Falcon said.

NDP finance critic Bruce Ralston said the government is using “funny math” to produce a rosy picture of the B.C. economy. One reason the past year’s deficit is so much lower is that B.C. collected $769 million from Ottawa, the second half of its $1.6 billion “bribe money” for adopting the HST, he said.

“People have a sense they are being played,” Ralston said. “They have an agenda, they want to ram the HST through and this is just one more instance of that.”

Falcon warned that if the HST is rejected in the referendum that is currently underway, that will cost the province about $3 billion over the next three years. Half of that is to repay the federal government, and the rest is transition costs and extra HST revenue that won’t be collected.

“We will have to manage that $3 billion hit, and the only way you can do that is either have larger deficits, which means borrowing more money and passing the bill onto future generations, or you can increase revenues, or you can reduce spending,” Falcon said.

Because the provincial budget remained in deficit, B.C. cabinet ministers will not receive a 10 per cent holdback to their salaries for the 2010-11 fiscal year.

Just Posted

Session will help Chilliwack seniors with paperwork plans

The June 25 info session will cover POAs, wills, and more

Question period won’t change after Chilliwack trustee motion fails

Public participation will continue to be limited to items on the night’s agenda

Chilliwack trustees divided on Trans Mountain pipeline route near two schools

School district will pen letter to NEB to ask for re-routing away from schools to be considered

Summer service by bus from Chilliwack to Cultus Lake starting soon

Seasonal change will see bus service from Vedder Road to Cultus elementary until Labour Day

Tractorgrease in Chilliwack looking for support after Open Mic shut down

‘Support Live Music at Tractorgrease’ fundraising campaign features free concerts June 28 and July 1

VIDEO: Acknowledging skeptics, finance minister vows to build Trans Mountain project

Bill Morneau said he recognizes ‘huge amount of anxiety’ in Calgary over future of oil and gas sector

B.C. man faces deportation over father’s honour-killing conviction

Father lied to immigration, was later acquitted of charges in Jassi Sidhu’s murder

RCMP allows officers to grow beards

Members can now wear beards and goatees, as long as they’re neatly groomed

Girl, 10, poisoned by carbon monoxide at B.C. campsite could soon return home

Lucille Beaurain died and daughter Micaela Walton, 10, was rushed to B.C. Children’s Hospital on May 18

30 years later: B.C. woman uses sidewalk chalk to reclaim site of her sexual assault

Vancouver woman didn’t think her powerful story, written in chalk, would ignite such support

Slain friend motivates rookie football player to make it with hometown B.C. Lions

Jaylen Sandhu, stabbed to death in 2014, a source of inspiration for promising RB Jamel Lyles

Men caught with illegal gun near Burnaby elementary school

They were sitting in a parked car near Cameron Elementary

Home care for B.C.’s elderly is too expensive and falls short: watchdog

Report says seniors must pay $8,800 a year for daily visits under provincial home support program

B.C. ‘struggling’ to meet needs of vulnerable youth in contracted care: auditor

Auditor general says youth in contracted residential services may not be getting support they need

Most Read