B.C. cuts $1.4B from deficit
The B.C. government finished the 2010-11 financial year with a much smaller deficit than it forecast, Finance Minister Kevin Falcon announced on Monday.
The province ended the fiscal year with a $309-million deficit — about $1.4 billion less than forecast last year — and Falcon said the province is on track to balance its budget in 2013-14.
The deficit is the amount the government is spending each year more than the revenue it takes in.
The total provincial debt increased by $3.3 billion to $45.2 billion when $1.9 billion in taxpayer supported debt to finance capital infrastructure projects and $1.4 billion in self-supporting debt is included.
Falcon credited tight control of government spending combined with an economic growth rate of four per cent and a 5.3 per cent increase in retail sales for reducing the deficit.
The government took in a total of $4.2 billion in revenue from the HST, which replaced the PST and GST in July 2010.
"We've seen stronger economic growth in B.C. suggesting consumer confidence has remained strong under the HST," said Falcon.
"This demonstrates our fiscal plan is working and we will continue to take a cautious approach to spending."
Government playing games with estimates says NDP
But NDP finance critic Bruce Ralston refuses to give the government any credit for the shrinking deficit. He says the government is playing games with voters in the lead-up to the HST referendum.
"This is an old story of starting out with an estimate that is way higher and coming in lower and patting yourself on the back, so I don't think there is any news there," said Ralston.
Falcon said there are still risks to the budget which the government does not control, including fluctuating commodity prices, the slower than expected recovery in the United States and the uncertain outcome of the Harmonized Sales Tax referendum.
"Change can happen very negatively very quickly," he said.
Falcon estimates the government would lose about $2.5 billion in revenue if the HST is rejected by voters in the ongoing mail-in referendum.
"Our deficit is going to get slammed obviously if it goes down," said Falcon.
It is expected the provincial government, under Premier Christy Clark, will table a new budget for the 2011-12 fiscal year in the fall.