B.C. deficit projections up $313 million
B.C.'s deficit is now projected to rise by $313 million to $3.1 billion by the end of the fiscal year because of lower revenues, Finance Minister Kevin Falcon announced in Victoria on Monday.
"While British Columbia is still expected to continue to outperform most other North American economies, we expect revenues to decline and we are revising our deficit calculations as a result," said Falcon.
Falcon says the government plan to balance the budget by the 2013/2014 fiscal year "remains fluid" because of the ongoing international financial uncertainty, but he should know by mid-January if B.C. will be able to hit that target.
"Obviously if international events continue to deteriorate and that hammers B.C. I am not going to be able to say we can balance at all costs at the expense of health, education and our budgets. That would be irresponsible."
"The forecast includes a $303 million decrease in revenue, mainly due to lower corporate income tax revenues, the impact of lower commodity prices on natural resource revenue, and reduced net income projections from commercial Crown corporations," said a statement released by the government.
"The province's projected spending in 2011-12 includes $30 million in additional statutory emergency program flood-related costs, partially offset by a net $20 million reduction in operating expenses," said the statement.
In September Falcon estimated the 2011/12 deficit would be $2.8 billion, following the rejection of the HST in a provincial referendum.
Falcon said he still expects it will take a full 18 months to eliminate the HST and return to the PST, the same prediction he made back in August when voters opted to scrap the HST.
Critics have been demanding a quicker return to the old tax, but Falcon says it's proving to be the most frustrating and challenging file he's ever handled.
B.C.'s total taxpayer-supported debt forecast stands at $36.5 billion for the end of the fiscal year.