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.

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

Co-creatorsAdrianna Hatton and Malcolm McKenzie stand next to the little free library revealed Sunday at 9710 First St. (Wolf Depner/News Staff)
Literary crowd helps opens little free library in Sidney

Located at 9710 First St., the book sharing box features original art and reclaimed wood

Deep Cove Elementary School principal Shelley Hardcastle (right) and vice-principal Mary Kaercher help to restock Reay Creek with fish – in this case, coho fry – after a recent bleach spill killed hundreds of fish. (Wolf Depner/News Staff)
North Saanich’s Deep Cove Elementary School helps to restock Sidney’s Reay Creek

Restocking followed bleach spill that killed hundreds of fish in creek

The barred owl is the most likely to be spotted in the south Island. (Ann Nightingale photo)
Barred owls dominate Greater Victoria owl-scape

Western screech owl population decimated, partly due to barred owls

Between June 1 and 7, 168 net unconditional sales were made for properties in the VREB region. (Black Press Media file photo)
Victoria home sales slightly behind last June’s pace

Benchmark value of single-family home in Greater Victoria tops $1 million

A new report pegs the annual cost of hiring a third party to monitor use of pickleball courts in North Saanich at $12,000. (Black Press Media file photo).
North Saanich could end up hiring third party to monitor pickleball courts

Other options up for consideration include use of cameras and timed locks

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

The Queen Victoria statue at the B.C. legislature was splattered with what looks like red paint on Friday. (Nicole Crescenzi/News Staff)
Queen Victoria statue at B.C. legislature vandalized Friday

Statue splattered with red paint by old growth forest proponents

Most Read