B.C. Finance Minister Colin Hanson estimates the province will post a $45- million surplus, despite the global economic slowdown. (CBC)

British Columbia will post a budget surplus of nearly half-a-billion dollars, despite the global economic slowdown, according to the latest report issued by Finance Minister Colin Hansen.

The second quarter financial report projects a surplus of $450 million in the 2008/09 fiscal year, down from the estimated $1 billion projected in the last quarterly report, said Hansen.

"The global economy is facing major challenges, and the significant drop in our revenues proves that B.C. is not immune," said Hansen in Victoria on Monday morning.

"But we are better positioned than other jurisdictions in North America," said Hansen. "Our strong and prudent fiscal management over the last seven years means we are now able to take measures that provide some certainty to families and businesses while maintaining a resilient economy and a balanced budget."

Difficult choices ahead

Nevertheless, Hansen cautioned taxpayers the government has little room for new programs and the coming budget will be the most difficult this government has had to prepare.

"The weaker economic outlook clearly means lower revenues going forward, in excess of $3 billion over the three years of the current fiscal plan," said Hansen.

The government will review expenditures in every ministry with the aim of protecting health care, education and social programs, but the bottom line is the government is looking for savings and there will be no deficit, Hansen said.

"Everybody needs to significantly reduce their expectations in terms of what the government may be able do in the way of incremental spending," he said.

The report also noted private-sector estimates that B.C.'s annual real GDP growth will decline to 1.4 per cent in 2008 and 1.3 per cent in 2009.

"Although growth forecasts for B.C. are lower than previously forecast, the overall growth outlook for B.C. in 2008 and 2009 at this time is projected to be more optimistic than Canada as a whole," said Hansen.

NDP calls for spending cuts

Meanwhile, the NDP finance critic Bruce Ralston doesn't think the government is being honest with British Columbians about the extent of the problem and just how and where it will cut spending.

"This government continues to spend like it's last year and really no reasonable steps have been taken or announced to rein in wasteful government spending," said Ralston on Monday.

"I think people expect that. They're looking for that and so far the government hasn't delivered on that at all," he said.

Despite the minister's commitment to a balanced budget, Ralston said he expects the government to slip into a deficit.