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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Kelowna’s last video store, Leo’s Video, to remain open despite failed sale

Kelowna’s last video rental store will remain open and under its namesake’s ownership

Two-vehicle collision slows traffic on Highway 97

Harvey is down to two lanes heading east past Dilworth is closed while crews clean up

Construction starts for new middle school in Lake Country

H.S. Grenda Middle School is scheduled to open in Sept. of 2021

Kelowna RCMP arrest three after string of break-ins from car dealerships

Police arrested the final suspect on Jan. 15 and recovered a Jeep worth around $84,000

Province could soon allow e-scooters on Kelowna streets

Okanagan e-scooter companies are currently limited to certain areas in the city

Older Canadians highlighted in Kelowna film project to fight ageism

The project is part of a campaign to combat ageism

Closed mills, housing surge support a positive forecast for lumber industries

B.C. lumber producers have closed mills accounting for 18% of province’s capacity, RBC report says

Good Samaritan pays part of rent for B.C. woman facing eviction in can-collecting dispute

Zora Hlevnjak, 76, supplements her pension by collecting cans and receiving public donations

Princeton – a Prince Town in waiting?

The Town of Princeton has been waiting 160 years for a Royal… Continue reading

Group builds shelters for Vernon’s stray cats

Twenty insulated cat shelters were constructed by volunteers and delivered around town

UBCO partners with Boeing to test new anti-ice coating technology

The coating could one day be applied to all airplanes to prevent ice buildup

Revelstoke already double last year’s snowfall

The city is just below halfway to the snowiest winter on record

True Stories: Okanagan memoir-writers, reading

Reading with local North Okanagan writers Art Dalton, Patti Shales Lefkos, Raven Dahl, Janelle Hardy

COLUMN: Choosing a face to show the world

It will not be easy to select the face to display on Canada’s new $5 bill

Most Read