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

Grads at Riverside Park in Vanderhoof, B.C. (Aman Parhar/Omineca Express)
Vanderhoof celebrates 2021 graduates

NVSS grads got together at Riverside Park on Friday, June 11 in… Continue reading

Singing and drumming was heard in downtown Vanderhoof on Monday, June 14. (Aman Parhar/Omineca Express)
Photos: Honour Walk held in Vanderhoof

An honour walk was held Monday June 14 in Vanderhoof, remembering the… Continue reading

Emergency crews responded to the scene of a suspicious fire at the southeast corner of the OK Café in Vanderhoof Friday, June 11. The historic building is 101-years-old. (BC RCMP photo)
OK Café in Vanderhoof alright after suspicious fire

Damage kept to a minimum by firefighters

A person receives a COVID-19 vaccine at a vaccination clinic run by Vancouver Coastal Health, in Richmond, B.C., Saturday, April 10, 2021. Northern Health confirmed it has the lowest vaccination rates amongst the province’s five regional health authorities. (THE CANADIAN PRESS/Jonathan Hayward)
Vaccination rates in Vanderhoof, Fraser Lake, Fort St James well below provincial average

COVID-19 immunization clinics for youth 12+ coming up in Fort St. James

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

(pixabay file shot)
B.C. ombudsperson labels youth confinement in jail ‘unsafe,’ calls for changes

Review states a maximum of 22 hours for youth, aged 12 from to 17, to be placed in solitary

Eleonore Alamillo-Laberge, 6, reads a book in Ottawa on Monday, June 12, 2017. THE CANADIAN PRESS/Sean Kilpatrick
Parents will need to fight ‘COVID learning slump’ over summer: B.C. literacy experts

Parents who play an active role in educating their children this summer can reverse the slump by nearly 80%, says Janet Mort

The border crossing on Highway 11 in Abbotsford heading south (file)
Western premiers call for clarity, timelines on international travel, reopening rules

Trudeau has called Thursday meeting, premiers say they expect to leave that meeting with a plan

The B.C. government’s vaccine booking website is busy processing second-dose appointments, with more than 76 per cent of adults having received a first dose. THE CANADIAN PRESS/Jonathan Hayward
B.C.’s COVID-19 infections, hospitalizations stable for Tuesday

108 new confirmed cases, 139 in hospital, 39 in intensive care

A worker, at left, tends to a customer at a cosmetics shop amid the COVID-19 pandemic Thursday, May 20, 2021, in Los Angeles. (AP Photo/Marcio Jose Sanchez)
Half of cosmetics sold in Canada, U.S. contain toxic chemicals: study

Researchers tested more than 230 commonly used cosmetics and found that 56% of foundations and eye products, 48% of lip products and 47% of mascaras contained high levels of fluorine

White Rock’s Marine Drive has been converted to one-way traffic to allow more patio space for waterfront restaurants. (Peace Arch News)
Province promotes permanent pub patios in B.C. post-pandemic plan

More than 2,000 temporary expansions from COVID-19 rules

Lake City Secondary School Williams Lake campus students Ethan Reid, from left, Brenden Higgins, Ty Oviatt, Kaleb Alphonse, Nathan Kendrick and Landon Brink with RCMP officers Const. Nicoll and Const. Stancec. (Photo submitted)
RCMP thank 6 teens for helping prevent forest fire in Williams Lake

The students came across fire in a wooded area and used the water they had to try and extinguish the flames

There is an emergency shelter near the Golden Ears peaks. (Facebook/Special to The News)
Hiker fogged in on Golden Ears, spends 2 nights

Talon Helicopters, Ridge Meadows Search and Rescue bring him home Monday

Most Read