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

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

The weekly COVID-19 map for June 6 to 12. (BC CDC)
South Okanagan sees only 5 new cases in last week

The Similkameen Valley went a second week without any new cases

Birtch Parlee is one of approximately 132,000 transgender people living across the nation, according to Statistics Canada. Photo submitted
Transgender in a small town – Princeton B.C.

“I buried it. I pushed it down. I lived a lie.”

A tent housing a mobile vaccination clinic. (Interior Health/Contributed)
Second dose vaccinations accelerating throughout region: Interior Health

To date, more than 675,000 doses have been administered throughout the region

Dan Albas
COLUMN: Reopening the international border

Governments in Canada and the United States are working towards reopening plans for the border

Okanagan Lake (File photo)
Thompson-Okanagan ready to welcome back tourists

The Thompson-Okanagan Tourism Association expects this summer to be a busy one

Bear wanders Kelowna on June 15. (Michelle Wallace/Facebook)
Bear climbs fence, uses crosswalk in Kelowna

The bear was spotted on Baron Road Wednesday evening

Hundreds of people, young and old, joined the three-day Walking Our Spirits Home procession, honouring residential school survivors, those who never made it home and all those affected by the institutions. Here people walk the third portion on June 13. (Martha Wickett - Salmon Arm Observer)
Walking Our Spirits Home from Kamloops provides path to healing

First Nations in and beyond Secwépemc territory join in to honour residential school survivors

More flames
Lake Country home destroyed in large blaze, 11 dogs rescued

Fire crews are responding to 10839 Hallam Drive

(Facebook/Kelowna Cabs)
Kelowna Cabs reaches tentative agreement with dispatchers union

The tentative agreement could help end the dispute between the taxi company and the dispatchers

FILE – A science class at L.A. Matheson Secondary in Surrey, B.C. on March 12, 2021. (Lauren Collins/Surrey Now Leader)
Teachers’ union wants more COVID transmission data as B.C. prepares for back-to-school

BCTF says that details will be important as province works on plan for September

A boat sharing service is extending to Summerland. The company, Penticton Boat Club and Rentals, is also taking over the boat rentals at Summerland Waterfront Resort. (Photo by Chris Stenberg)
Boat sharing service extended from Penticton to Summerland

Company will also operate boat rentals at Summerland Waterfront Resort

201 First Street West 1980s. Prior revitalization. (Photo from Revelstoke Museum and Archives)
Man who redesigned downtown Revelstoke honoured with lifetime achievement award

Robert Inwood has worked on historical projects across the province

Provincial health officer Dr. Bonnie Henry outlines B.C.’s COVID-19 restart plan, May 25, 2021, including larger gatherings and a possible easing of mandatory masks on July 1. (B.C. government photo)
B.C. records 120 new COVID-19 cases, second vaccines accelerating

Lower Pfizer deliveries for early July, Moderna shipments up

The weekly COVID-19 map for June 6 to 12. (BC CDC)
South Okanagan sees only 5 new cases in last week

The Similkameen Valley went a second week without any new cases

Most Read