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.

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

Just Posted

NEW CUTLINE Payphone use is declining dramatically. (Black Press Files)

One of the last remaining street payphones in Kelowna. (Photo: Mackenzie Britton/Capital News)
Last call approaches for payphones?

Mobile phones diminishing need

Harmony Project Sooke students recently performed at the B.C. legislature. Harmony Project Sooke runs a stings program for viola, violin, and cello for students in Grade 2 and up and a drum line program for grades six and up. (Contributed – Harmony Project Sooke)
Gift and program support young Sooke musicians

Harmony Project Sooke students shine

West Shore RCMP is requesting the public’s assistance in locating a missing Langford resident, Nevaeh Hansell. (West Shore RCMP)
MISSING: Police seek 13-year-old Langford girl last seen May 3

Police are asking for help to locate the teen

The Capital Regional District’s Langford-based fire dispatch could be dissolved by the end of the year, replaced by a larger dispatcher in Saanich or Surrey. (Black Press Media file photo)
Langford-based CRD Fire Dispatch could see its last call this year

$1 million in mandatory upgrades too expensive for local municipalities, says Langford mayor

A few of the 10 or so workers from Ocean Concrete on the line Wednesday wave to passing motorists who honked in support of the locked out employees. A lockout by the company began April 30 and affects 23 workers at the company’s Victoria branch. (Don Descoteau/News Staff)
No concrete deal in place, Victoria workers locked out

Ocean Concrete locks out 23 workers at Victoria plant as bargaining stalls

FILE – Pharmacist Barbara Violo shows off a vile of the Oxford-AstraZeneca COVID-19 vaccine at the Junction Chemist, an independent pharmacy in Toronto, Friday, March 12, 2021. THE CANADIAN PRESS/Nathan Denette
Looking for the nearest COVID shot? Tech entrepreneur creates texting software in B.C

Zain Manji says app took just one or two hours to create

B.C.'s provincial health officer, Dr. Bonnie Henry. THE CANADIAN PRESS/Jonathan Hayward
Dip in COVID-19 cases with 572 newly announced in B.C.

No new deaths have been reported but hospitalized patients are up to 481, with 161 being treated in intensive care

FILE – A student arrives at school as teachers dressed in red participate in a solidarity march to raise awareness about cases of COVID-19 at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. THE CANADIAN PRESS/Darryl Dyck
B.C. ‘should be able to’ offer 1st dose of COVID vaccine to kids 12+ by end of June: Henry

Health Canada authorized the vaccine for younger teens this morning

A woman in the Harrison Mills area was attacked by a cougar on Tuesday, May 4. B.C. Conservation Officers killed two male cougars in the area; the attack was determined to be predatory in nature. (File photo)
2 cougars killed following attack on woman in Agassiz area

Attack victim remains in hospital in stable condition

A woman wears a face mask and shield to curb the spread of COVID-19 while walking in North Vancouver, B.C., on Wednesday, January 6, 2021. THE CANADIAN PRESS/Darryl Dyck
B.C. CDC updates info, acknowledging small respiratory droplets can spread COVID-19

Large droplets, not aerosols had been fixture of public health messaging for many months

(Black Press Media file photo)
POLL: Do you plan to travel on the Victoria Day long weekend?

It’s the unofficial start to the summer season. A time of barbecues,… Continue reading

Arrowsmith Search and Rescue members, before descending into a gorge near Nile Creek to rescue an injured woman on Sunday, May 2, 2021. (ASAR Twitter photo)
SAR crews help rescue hiker who plunged 10 metres onto rocks near Qualicum

Helicopter with winch system required for technical operation in remote location

A picture of Shirley Ann Soosay was rendered from a postmortem photographer and circulated on social media. (DDP graphic)
B.C. genealogist key to naming murder victim in decades-old California cold case

In July 1980, Shirley Ann Soosay was raped and stabbed to death

Most Read