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

West Kelowna pauses Re-leaf Program after COVID-19 confirmed at local nursery

Tree deliveries are paused until further notice after outbreak confirmed March 31

UPDATE: 6.5-magnitude earthquake in Idaho shakes B.C. Interior

An earthquake was reportedly felt just before 5 p.m. throughout the Okanagan

COVID-19: Non-profit 3D printing face shields for local hospital

‘The response has been completely overwhelming’

Outbreak of COVID-19 at West Kelowna agricultural business; 14 cases confirmed

75 workers are in isolation — 63 migrant workers and 12 local workers

Memorial Cup concert with Brett Kissel canceled amid COVID-19 concerns

Brett Kissel was scheduled to perform at Live on Lake in Kelowna on May 30

B.C. records five new COVID-19 deaths, ‘zero chance’ life will return to normal in April

Province continue to have a recovery rate of about 50 per cent

Community drums up support for North Okanagan hospital workers

Even health care workers and fellow first responders turned out to show love

South Okanagan first responders salute hospital workers

“You’re awesome” and “Thank you” say Penticton first responders, passing by emergency entrance

John Horgan extends B.C.’s state of emergency for COVID-19

Premier urges everyone to follow Dr. Bonnie Henry’s advice

B.C.’s first community COVID-19 death was dentist ‘dedicated’ to health: lawyer

Vincent was 64 when he died on March 22 after attending the Pacific Dental Conference

Two inmates at prison housing Robert Pickton test positive for COVID-19

Correctional Service of Canada did not release any details on the identities of the inmates

‘April Fools’ social media prank leads to criminal investigation in Osoyoos

Post claims individuals will be canvassing door to door seeking housing for seasonal workers

Stay inside vehicles on Interior ferry crossings to prevent spread of COVID-19: B.C. government

Glade, Kootenay and Arrow Lakes some of the ferry crossings in Interior

Grocery pickups and other supports available for Shuswap seniors living at home

BC 211 is another way to connect with Shuswap Better at Home program

Most Read