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

Rainfall warning: Up to 70 mm expected across Fraser Valley

Environment Canada issued a weather warning heading into the long weekend

Chilliwack students take the lead as mental health advocates

About 100 Chilliwack youth prepped to make a difference during Mental Health Week

Chilliwack PEO: ‘We who are sisters’

International oganization celebrating 150 years of service

No more mobile vendors on Harrison beach

The approval of an updated business licence bylaw means Nolan Irwin is without a cart

BC Ferries to pilot selling beer and wine on select routes

Drinks from select B.C. breweries and VQA wineries to be sold on Swartz Bay to Tsawwassen route

VIDEO: Alberta man creates world’s biggest caricature

Dean Foster is trying to break the world record for a radio show contest

B.C. RCMP receive application for Police Cat Services

RCMP announced the launch of the Police Cat Services unit as an April fools joke

Rats available for adoption in Vancouver

In a social media post the City of Vancouver says you can adopt a rat for $5.

Kirkland Signature veggie burgers recalled due to possible metal fragments

Recalled products came in 1.7 kg packages with a best before date of Apr. 23, 2019

Chaos at the ferry terminal for people heading from Vancouver to the Island

Easter crowds create backlog at Tsawwassen ferry terminal

Parents of 13 who tortured children get life after hearing victims

One of their daughters fled their home and pleaded for help to a 911 operator

Crews battle Burnaby blaze; 2 people sent to hospital

Emergency Support Services helping residents displaced by fire

Flooding, climate change force Quebecers to rethink relationship with water

Compensation for victims of recurring floods limit to 50% of a home’s value, or a maximum of $100,000

Storms blast South, where tornadoes threaten several states

9.7 million people in the Carolinas and Virginia at a moderate risk of severe weather

Most Read