The British Columbia government will run deficit budgets in each of the next two fiscal years, Premier Gordon Campbell and Finance Minister Colin Hansen said in a press conference today.

“As recently as two weeks ago I was still confident we could table a balanced budget without cutting health and education,” said Hansen. But the American and global economies are in such rough shape that's no longer possible, he said. “B.C. played no role in precipitating this international crisis, but we are certainly feeling its effects.”

Hansen said he could not say yet how deep the deficits would be, but he expects to return to a balanced budget for the 2001-2012 fiscal year. “The numbers continue to deteriorate for us,” he said.

“This is obviously a very difficult day for all of us,” said Campbell. “I hate deficits. I think they take away from future generations . . . I know I have supporters who will be disappointed. Some may even be angry.”

The averaged predictions of the 12 members of the province's economic forecast council in December put growth at 0.6 percent for B.C., but in January they downgraded their prediction to 0 percent. Campbell said there isn't agreement yet whether the province is experiencing flat growth or a recession.

“We're facing a situation we couldn't plan for,” he said. “Maybe we should have seen it coming.”

The Tyee reported in March, 2008, that there were clear signs the economy was weakening and the provincial government appeared unprepared despite the warnings.

B.C.'s Balanced Budget and Ministerial Accountability Act requires the government to prepare balanced budgets. Campbell said the legislature will be recalled a day early, on February 9, to begin making the necessary changes to the law.

Responding to questions from reporters, Campbell said 20 percent of cabinet ministers' salaries are held back. Ten percent of that is returned if they balance their ministries budgets, and the other 10 percent is for a balanced government-wide budget. Said Campbell, “Cabinet ministers will take a 10 percent reduction in their salaries if there's not a balanced budget.”

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.