VICTORIA – The provincial deficit under the BC Liberals has gone up by nearly $330 million, to $1.47 billion, a number that is way worse than what the government anticipated.
As a result, the plan is to cut spending across all ministries which will happen by freezing salaries and spending while scaling back on travel costs and discretionary spending. Given that, the province is hoping to recoup about $80 million, reported News 1130..
At $6.9 billion, total capital spending is expected to be $152 million lower than the budget this year.
However, Finance Minister Mike de Jong says there is way more work to be done. “The balance target, in a way, that I think will withstand reasonable scrutiny; we’ve still got about $200 to $300 million of work to do.”
He says BC will balance the books and the government won’t make cuts to services like health and education. “The budget is a blueprint that we believe, credibly, demonstrates how that can be achieved. It is to be sure a plan built around the best fiscal advice that we have been able to achieve.”
There are two main reasons behind the deficit. One, the sale of the Little Mountain property, which won’t be included in the government’s savings until next year because the City of Vancouver didn’t give zoning approval until June of 2013.
The other, is the US fiscal cliff. “The economists see the US as continuing to muddle along, they don’t actually see the US falling over the fiscal cliff.”
Regardless of all these numbers, BC remains on track to re-implement the Provincial Sales Tax (PST) on April 1st, 2013 with all previous exemptions in place. It will also try to regain revenue by increasing trade with countries like China and India.
