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BC Budget Built on HST Revenues
Money from natural gas, forestry, crown corporations falls below forecasted targets.
Finance Minister Colin Hansen delivers 2011 budget Tuesday.
Finance Minister Colin Hansen presented a budget Feb. 15 that he said leaves plenty of room for whoever wins the Liberal leadership and becomes premier.
HST revenues came in above projections, while natural resource and crown corporations revenues fell sharply short. And while the deficit for fiscal 2010-2011 shrank to $1.3 billion from a projected $1.7 billion, the province's total debt is expected to reach a level in 2011-2012 equal to a year's revenue.
Hansen criticized media reports suggesting today's budget will never be debated and said it would be a lot of work for finance ministry staff to go through a fresh budget process. "This is a budget that could very well be passed by the legislature," he said.
It includes a $350 million forecast allowance for the 2011-2012 fiscal year and $600 million for contingencies.
"There's been enough financial improvement that it does leave us a little bit more room for decisions," said leadership candidate George Abbott. Some of those decisions will be tough for the caucus and the cabinet to make, but there's room to manage the deficit and give ministries the resources they need to generate as much revenue as possible, he said.
Abbott said he expects the budget to be passed, with a supplementary budget introduced in the fall.
Mike de Jong, who is also running to lead the Liberals, said the flexibility may not be as large as it appears. "My guess is some of it has already been notionally committed," he said. "It may not be $600 million. It may be appreciably less than that."
Leadership contestants should be wary of making promises that cost money, he said. "We are still in a very fragile state," he said. "While there is a recovery underway, it is a fragile one."
Christy Clark said the budget confirms her leadership platform that commits to balancing the budget before offering any new tax cuts or large spending commitments. Her platform includes incentives designed to affect job creation and fighting poverty, she said. "I am pleased that today's budget will provide us with the flexibility to move forward in these priority areas."
Liberal members will vote on Feb. 26 for a new leader to replace Premier Gordon Campbell.
Low bar not met: NDP
"The finance minister set himself a very, very low bar, but even by that low standard he didn't really jump over it," said NDP finance critic Bruce Ralston.
"They piled up a pretty big pile of cash for the incoming leader to spend as he or she sees fit," he said.
In the deficit budget presented before the 2009 election, the Liberals included no forecast allowance, he noted, while this one includes $300 million to allow for volatility in the economy. "When it was politically convenient in 2009 they cut those forecast allowances to zero, they said they didn't need them, in order to create a false impression of a low deficit. Now they want some money for the new leader to spend, they ramp that up."
He called it a "cynical game," but added that the public has come to expect that from the government's budgets.
As in past years the budget gives subsidies to corporations to exploit natural resources, while offering little to anyone else, said Green Party leader Jane Sterk.
"They continue to subsidize the very industries that are preventing us from becoming a low carbon economy," she said. "It's the course they've been on. It's a very ideologically driven party. They don't believe in a public good. They believe the only people who can provide good value for a dollar is the private sector."
The health ministry needs "a complete reorganization" to control costs, she said. "The health authority model has put all sorts of money into administration," she said. "It's all top heavy."
HST revenue up, gas royalties down
Budget documents show a major shift in the source of the government's revenues. Revenues from natural resources have fallen while the amount collected with the Harmonized Sales Tax has increased.
'STATUS QUO' BUDGET WOULD NOT SURVIVE HST REPEAL
The provincial budget delivered today by Finance Minister Colin Hansen is described as a status quo budget, but that depends entirely on the harmonized sales tax.
The budget was created assuming the HST would survive the upcoming referendum. All the financial figures depend on the province being able to turn around public opinion on the new tax system.
Hansen said the tax falling would pose significant cost to the province, most significantly the $1.6 billion they would have to pay back to Ottawa. The switch back to the PST would also leave a revenue gap for the province to contend with that was not planned for in this budget. Current revenue projections for the HST are over $5.8 billion for the upcoming year. A return to the PST would see a decline in this revenue number.
"There would be impacts on the economy that would be almost immediate," Hansen said.
He said the removal of HST would send a negative signal out to global investors who are looking to invest and create jobs in British Columbia. Hansen estimates just switching back to the PST collections system would cost the province $30 million a year. He could not give an exact cost total for a transition back to PST, but said he hopes to have those numbers before the referendum.
A defeat of the HST would leave the government with a lot of logistical issues to sort out, many of which Hansen admits the government has yet to evaluate.
"Repeal will be complicated and will take a long time to do," Hansen said. "No province has ever backed out of HST after implementation."
When asked whether it was prudent to pass a budget with such a significant question mark and no clear contingency plan in the event of HST repeal, Hansen said, "The budget needs to reflect the current reality."
The NDP finance critic, Bruce Ralston, criticized the government's position regarding HST and the budget.
"I think they have a number, it's a fear tactic and I think it's short-sighted," Ralston said. "If they genuinely don't have an idea of what a transition will cost that's a colossal failure on their part. But I think they do have an idea, I think the Ministry of Finance does have an idea, they've just chosen to hide it from British Columbia for tactical purposes as they face a referendum."-- Calyn Shaw
Natural gas revenues for the 2010-2011 fiscal year dropped from a budgeted $698 million to $365 million, according to the updated forecast, and forest revenue was off by $69 million.
The province also received less money than expected from Crown Corporations. While revenue from ICBC was up 19 per cent from last year's budget, BC Hydro (7.5 per cent), the liquor distribution branch (7.9 per cent) and the BC Lottery Corporation (3.2 per cent) were all below expectations.
At the same time, corporate income taxes were 93 per cent higher than expected and HST revenue was 10.2 per cent higher than expected. Income from the carbon tax was also up slightly.
Stakeholders at the budget lock up in Victoria tended to criticize what they felt was missing in the budget.
"We're seeing cuts to seniors' services, we're seeing cuts to mental health, we're seeing patients waiting in emergency departments," said Deb Ducharme, provincial executive councillor for the B.C. Nurses' Union. "That's going to continue with this budget."
The province could save money on health care by focussing on prevention and by using nurses better in primary health care, she said. "Those programs are all also being cut in this budget."
Opportunities missed
The representative for children and youth, Mary Ellen Turpel-Lafond, said bond ratings aren't the only way to measure success. "So is child poverty and we've been failing on that front," she said. "I would have liked to see more analysis of the budget on the impact on families."
The financial downturn has deepened poverty for many people, she said. "What about the lives of families who are struggling today? How are we going to respond to that? Does the government have a duty of care to those families, or is the duty of care simply to the business community? I think we have to broaden that out."
"A status quo budget translates into cuts for school districts," said Glen Hansman, second vice president with the B.C. Teachers' Federation. Costs keep going up and the budget will mean school districts will have to make cuts, he said.
Nor does there appear to be enough money for full-day kindergarten, he said. "They're funding it just for the staffing component," he said. "You need the resources, the sandbox and the carpet and all that stuff, access to washrooms and changerooms that are appropriate for those little people, the additional supervision that's needed."
Chamber of Commerce President John Winter said the growth of the debt was understandable. "I'd be concerned if we weren't coming out of a period of serious recession where we didn't take part with the federal government to invest in stimulus packages and something that was considered to be responsible debt growth," he said.
Cancelling the HST would be "catastrophic" for the government's budget and the province's economy, he warned. "People who think they are going back to the status quo have another thing coming," he said. "Consumption taxes are the way to go." ![]()




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rantnic
1 year ago
LETS BLEVE
All of that 1.6 billion has been spent by the liberals and is of coarse, no longer available to be given back to the feds. Maybe Mr Falcon would like to explain exactly where that 1.6 billion dollars has been spent? Perhaps only a portion of that 1.6 has been spent, if so how much? What would it really cost the taxpayers of B.C. to dump the HST and pay back the feds gift?
Excuse me for asking such dumb questions,as they after all, only cloud the real political realities of our province.
pianosaurus rex
1 year ago
it is avaiable
ICBC has 3.6 billion in their coffers and, by law only requires 1.6 billion to cover future claims. This reveals two things;
#1. That the 1.6 billion the feds gave for the implementation of the HST could be returned to them without a blink of an eye…
#2. That British Columbians have been over-charged for auto insurance for a long time.
onthebay
1 year ago
Just asking for more information
A 93% increase in corporate income taxes could mean they went from $1.00 to $1.93, and a 10.2% increase in HST revenues could mean they went from $1,000,000.00 to $1,102,000.00. It would be nice to know what the actual amounts were, and, if it’s not too much to ask, what percent of overall provincial revenues each of the revenue sources provides.
Karen D.
1 year ago
BC should be in the black
With all the windfalls this government has had in the past ten years B.C. should be well into the black. They received $1 billion for selling off BC Rail, $1.6 billion for implementing the HST (final pymt of $580 million to be paid this July), gargantuan 7 figure revenue increases from gambling, looting ICBC coffers, the Carbon tax, cuts to numerous social programs and user-fee increases.
Anyone who believes that this government has run B.C. in a fiscally responsible manner should have their head examimed.
Van Isle
1 year ago
So, how come all the Liberal
So, how come all the Liberal Premier 'wannabees' haven't been asked those basic budget questions? Oh, silly me, of course no one, especially the mass-media, will dare ask something that may embarrass those twits.
jim1966
1 year ago
Not An Acceptable Budget
Not to me anyways and not to the many good honest hard working people of BC. I agree that the BC Liberals REALLY missed the boat on this so called 'status quo" budget. This budget might have been tight but the government should have done more for what we pay them to do. Sadly under this regime I highly doubt that much change will occur. Bring on an election and when the BC Liberals are in oppostion they can whine and cry all they wish.
mary jane
1 year ago
do we believe it
Considering the lieberals history do we believe
any of it? Why give icbc so much when the rip off those in need of help? will we survive the next bunch of lies and mismanagement?
cboo44
1 year ago
BC Should be in the Black ???
"With all the windfalls this government has had in the past ten years B.C. should be well into the black. They received $1 billion for selling off BC Rail,..........."
No, you see the corrupt deal with CN included an ongoing operating TAX CREDIT, which in the future will amount to a BILLION dollars ! The BC Rail "deal" was a GIVEAWAY of a MONEY-MAKING CROWN CORPORATION.
The fraudulent "Carbon Tax" is only being paid by SELECT BC citizens, there are exemptions all over the place! BC Hydro would be rolling in cash profits IF THE LIEBERALS HAD NOT FORCED THEM TO BUY "GREEN POWER" AT ARTIFICIALLY HIGH PRICES! Why do you think our rates are going up? To pay off Gordos friends on the boards of IPP's.
Crescent
1 year ago
Liberal Debt Is From White Elephant Spending
No surprise - the debt to 100% of government revenues resulted from Olympic (hand-off to corporations) $7 billion in spending, plus $3.5 billion new bridge, $0.5 billion stadium roof, plus numerous and expensive P3's, plus out of control government overheads, plus salary for life MLA pay. And now we are expected to pay with increased consumer taxes and public service cuts. No way!
The consumer tax increases and service cuts need to be looked at in the context of a widening income and wealth inequality. I encourage you to look up this income inequality history; the middle to lower incomes since the 1070's have been paying for the rich to get richer. It's time to change the direction of this injustice.
Rather, we need to tax the corporations on their windfall profits from government pro corporate spending. Then move to a fair tax approach to reduce the growing and gross income/wealth inequality which has resulted from this government spending and to let the wealthy pay for the government largess they promoted.
kootenay
1 year ago
Nicely said Crescent
The middle class continues to lose support, but still we blindly tick along like all is well.
I hope we don't have to reach the degree of inequality and government corruption of Middle Eastern countries or worse, before we finally wake the hell up and stand united against the status quo.
I guess we just don’t hurt enough yet, how low must we go?
jozero
1 year ago
Reality
Reality is revenue for governments are falling around the world, regardless if you support the party or not. I really hate the way the HST was introduced, but I've been sold on how it makes business sense.
What I'm definitely not interested in is a local and state government melt down like what is happening in the States. Public programs are being slashed to the bone, and by programs I mean mass Police and Firemen layoffs.
If the provincial revenue in Canada is being helped by HST, AND it helps business then I'm fine with it. The reality is government needs taxes to run all the stuff we enjoy.
Andrew MacLeod
1 year ago
@ onthebay
I was trying not to overload the piece with numbers any more than it already is, but here is what you are looking for, from pg. 5 of the Estimates book:
Harmonized Sales Tax revenue
2010/11 Estimates: $3.784 billion
2010/11 Updated forecast: $4.171 billion
2011/12 Estimates: $5.82 billion
Corporate income taxation revenue
2010/11 Estimates: $847 million
2010/11 Updated forecast: $1.638 billion
2011/12 Estimates: $1.571 billion
Natural gas royalties
2010/11 Estimates: $698 million
2010/11 Updated forecast: $365 million
2011/12 Estimates: $447 million
morechatter
1 year ago
The rich are getting rich
And the poor are dropping while the former middle class takes their place. The now no class are trying to make it through each month with the threat of rising interest rates biting at their heals. Voted themselves right into the poor house with promises of all getting rich isn't democracy wonderful?
Skywalker
1 year ago
Excellent Article and posts.
It becomes clearer every day that this corrupt bunch needs to be gone.
morechatter
1 year ago
HST helping business
Sorry you got it wrong there have been no new jobs created while the restaurant industry has talked of a 30% loss of business. It is a new age and business is geared to downsizing and technology to pick up the slack and if your into making the rich, richer that is all you will get. Will the greedy share the wealth?
With the rich getting rich it is not in the math.
morechatter
1 year ago
kootenay
When I watched the event unfold on TV it reminded me of the HST, a first where voters where tired of their government refusing to listen to their concerns. Egyptians also have had enough of their government turning a deaf ear only Egyptains didn't stop there. British Columbians and their democratic system where made promises that will never materialize as BC still has the HST. But what can you expect from a bunch of liars but more stories on how the HST is good for British Columbians because it is good to give to the rich. Apparently the rich share their wealth. It is certainly not the experience of the most vunerable in the land. BC's Kids are left in situations where infants are kept barely alive without any hope of a future as their deaths should be no surprise as cuts to children services makes it way into the pockets of the rich.
longtallsally
1 year ago
We need a hero
...and I don't know where we're going to find one. The Liberals keep pushing their HST agenda. The HST puts our rights to tax regulation with the feds - we've seen that go sideways a few times before. The feds aren't worried about the colonies to the west so any tax decisions will be based on Ontario and Quebec and if it doesn't suit B.C., tough luck. That's one concern about HST. Now on to B.C. politics. Who can you trust? Basically, nobody. Christy Clarke's people keep phoning me, and all I can say is that she's the best of a bad bunch. A very bad bunch. Then we have the NDP, who just had to keep their mouths shut and stand behind Carole James in order to win the election. They couldn't do it - they have shot themselves in the foot in a magnificent fashion. So who do we turn to? You've got me - I don't know. I will never vote for the Liberals again, and I used to be a card carrying member. The NDP seem like a collection of Elmer Fudds. Should I just spoil a ballot? Doesn't seem like an answer. We need a hero. And I don't see anyone galloping up.
Terrys_Hot
1 year ago
Fudget-Budget
This is a budget that should have gone straight too the garbage can, along with Colin Hansen. What BC really needs is what the people did in Egypt too get rid of the tyrants. Gordo made a name for himself as the worst hated premier of all time. As for the HST and the money Ottawa is sending us what happened too the 5 million that Gordon Campbell sent too Harper over the last 5 or 6 years that should be payment enough for the province. What BC should do is what Quebec has been threatening too do for years. SEPARATE and see how long Canada can live without BC
Blake
1 year ago
So, where is the plan?
That's great Colin. Nice powerpoint presentation with yellow (NDP) and blue (Liberals) colours, that show how you have cut taxes and so on and so on. Basically a presentation shining a spotlight on the NDP recession years and the Liberal boom years. There is no plan though. The revenues are falling and the debt is climbing. Colin Clout and his cronies continue to sell off the province to big business while cutting public spending. I'm sick of subsidizing global corporations that give nothing back to our province, Colin. Please can we remove these parasites from parliament.
sunshine coast girl
1 year ago
Pretty scary to be living in a province
that is run on tax revenues.
x4estworker
1 year ago
Liberal Hypocrites
If the NDP had produced a budget that increased the debt this much, they would have been roasted by the business community.
But of course, the Liberals are just lapdogs when it comes to serving the needs of big business. They could ring up as big a deficit as they want and the business community will be there with words of support. All the more reason why Kevin Falcon should never be premier, given his huge support from business.
greengreen
1 year ago
hilarious
"Chamber of Commerce President, John Winter said the growth of the debt was understandable." Can you imagine what Mr. Winter would be saying if the NDP were in power? What a field day The Sun and Province would be having!
Jerry Munro
1 year ago
There Ain't No Hero...
"It becomes clearer every day that this corrupt bunch needs to be gone." Skywalker.
True enough. But what? To be replaced by another corrupted chickenshit bunch from one of the other factions to the One Big Party of Capitalism?
Some of you think so. I don't.
It "might" be nice if there was a real "hero" out there, as somebody mentioned above here, coming to save us. Hell, Christians have been waiting for that second coming for a few thousand years, and no sign yet. I think it's time to give up on the reliance on some coming hero or "hero party crew".
They don't exist. They aren't out there. The working masses are going to have to do it for themselves, and build organization and more representative and "controllable" leadership over the course of that "spontaneous" movement. Or it ain't gonna happen.
There is no New Christ going to descend down from heaven and save the people of the present. They will do it themselves or accept the growing impoverishment and powerlessness of the new capitalism reality, OR perish.
And I ain't got no bets placed yet, as to which is going to happen first. Just hopes, still fairly wan at this point.
Heroes will emerge out of the coming struggle, or there aren't any... male, female, straight or queer.
And I believe in the existence of heroes. It's just that they are, it seems, still out there in the political wilderness and voiceless, awaiting the emergence of concrete evidence that the time is worth their effort and sacrifice.
What? They should willingly set themselves up to be crucified? 8-D lol
That's a fool you're wanting, not a hero. Heroes are smarter than that... I would hope.
middleclassguy
1 year ago
WOW!!!!!!!!
HONESTLY ALL OF YOU GUYS MADE EXCELLENT COMMENTS!!!!!!!!
I REGISTERED JUST TO MAKE THAT COMMENT FOR ALL OF YOU.
WE ALL HAVE A TOUGH FIGHT AHEAD, AND IM USING ALL CAPS JUST TO MAKE MY POINT CLEAR.
THE LIBERALS HAVE SCREWED US FOR A LONG TIME!!! WE ALL NEED TO GET OUT THERE AND MAKE THE CHANGE THAT WE ALL WANT. I'M STILL YOUNG AND KNOW FOR MYSELF BEING A MIDDLE CLASS PERSON THAT ITS TOUGH OUT THERE, AND ONLY GETTING TOUGHER. I'M 26 AND AM BASICLLY LIVING CHEQUE TO CHEQUE.
PLEASE LETS JUST VOTE THE LIBERALS OUT!!!!
ps sorry for the spelling and grammer mistakes.
RickW
1 year ago
http://money.ca.msn.com/savin
http://money.ca.msn.com/savings-debt/gallery/gallery.aspx?cp-documentid=27689052
Skywalker
1 year ago
Jerry Munroe
In the absence or any other alternative, unless you start one quickly, I think the option is very clear if you want to get rid of this bunch of deceitful BS'ers. Anything is a big improvement, even the NDP with all the flaws you mention. By BC liberal standards the NDP were "terrific". Damn straight!
pipefitter
1 year ago
hst
Apparently Mr Hansen has just added to the list of lies. The bc gov hasn't yet received all of the 1,6 billion bribe yet from Harper. They have only received .6 billion and won't get the rest until july. They keep telling us that they will have to pay back the 1.6 billion if we reject the HST in the referendum vote. The HST will make 2 to 3 billion to add to the bc money pit this year. We can give the Feds back the .6 bil and get this form of tax from off our backs and returned it to the buisinesses to let them share in the cost of developing our province. We don't want to join the ranks of all the countries who have cut taxes to companies and in doing so have cut their own throats by cutting their tax base and transfering tax to us consumers.
mary jane
1 year ago
is there enough courage?
Many may not be as bad off as those who have been taking back there countries and have make their ideas of democray known around the world
Will we be pushed that far?? Will we stand our ground or not?
zalm
1 year ago
more savings
I can save a billion off this year's budget right now. End all road-building subsidies for the natural gas industry. That was $980 million last year, plus an additional loss due to the water trucks that paid the industrial rate (when the paid anything at all) to line up at our water reservoirs and rives to seize our drinking and fishing water and dump it ino the wells to "frac" more production out. Then, after production was proved, many of the wells were capped for future times when the price of natural gas is higher, and, just maybe, our already lower-than-Alberta royalties might be lowered even further, or made non-existent.
Nobody, but nobody, least of all those so-called financial geniuses in the Ledge or in Big Biz, are even close to exercising their brains on honest-to-goodness ways to save money. They're as intellectually crippled as the candidates for Preem.
onthebay
1 year ago
Thanks for the numbers
Sorry for the delay in thanking you for the additional stats, Andrew (just working hard for a living). Is the document they come from a publicly accesible one? If so, can you steer us in its direction?
Jerry Munro
1 year ago
Toe to Toe...
"By BC liberal standards the NDP were "terrific". Damn straight!" Skywalker
By BC Liberal standards, the cons in BC's maximum security Kent Penitentiary are terrific, and model citizens too. If not always straight. :-)
I ain't about to vote for one of them either though.
Sorry Skywalker. It's just that in my view, it's going to take more then you folks, many with good hearts and intentions I know, to overcome this period the province and all capitalism are in. It's going to take more than nice... and playing by their rules. And you folks are just too bound by the Rules of Etiquette and Queensbury Rules. That's why they get away with creaming you all the time. They know it's a dirty fight.
Show me a little real toughness, and a willingness to go toe to toe with them, in the mud, the blood and the beer :-), and I'll at least give it a reconsider. That's a promise. Strictly tactically. (I'm still convinced all vanguard parties are more a part of the problem than the solution.)
Andrew MacLeod
1 year ago
@ onthebay
The government's webpage on the 2011 budget is here: http://www.bcbudget.gov.bc.ca/2011/default.htm
It includes a link to a PDF of the Estimates book: http://www.bcbudget.gov.bc.ca/2011/estimates/2011_Estimates.pdf
As well as to the Budget and Fiscal Plan overview document: http://www.bcbudget.gov.bc.ca/2011/bfp/2011_Budget_Fiscal_Plan.pdf
ooolaah
1 year ago
Purpose of HST ???
Can someone help me, what is the HST supposed to be for anyways? What does the Liberals propose to use it on... a couple years ago they didn't have it, and now they do... this should mean that the people ( the ones that worked for it ) should be getting some more services. ????
Also, does anyone know why the government keeps selling off crown corporations? I believe that some of them were making some money.... so it would be useful to keep them... besides if business is so great... why can't the government do good business????
BDD63
1 year ago
Consumption Taxes Are The Way To Go
Oh they are, are they?
Well maybe I'll give myself a little tax relief by not consuming quite so much. Or rather, I'll still consume but I'll make an effort to consume what I have created myself. And if I can't create it myself let me question if I actually do need to consume it. Maybe yes maybe no. And if it is yes, before I run to Walmart or shop online, let me look around to my family and friends. Hey look! Cousin Bob can help me out and I can help him out with something he needs or a friend of his needs and I know a guy who can help you get that and we still consume but cut out the Businessman and cut out the Chamber and cut out the Multinational and spend our money where we want and cut out the tax man and give the money directly to someone who will actually say "Thank you buddy. Much appreciated"
mary jane
1 year ago
mu view of hst
Its so we can support big business and they can suck us dry
its to create greater poverty in bc - If we can't get enough food we won;t see what they are doing
If we are so busy working for stuff we may not see or will be distacted to what is going on
Using a dry drunk view of the politians we will have a clearer view of the BS they try to force down our throats
jim1966
1 year ago
If The Liberals Win Another Election
Scary huh?, I think so, you can rant and rave all you want but for goodness sake get out and vote next time will ya! Last time I looked this province belonged to the citizens who live and pay through the nose for almost everything. The so called Liberal "new plan" is nothing new. These same folks did NOT oppose thier governments cuts to the most needy and vulnerable, they had no problems with the sale and debalce of BC Rail and let us not forget thier previous leaders HST, (and rememember we were hoodwinked over that one as well). Bring on a provincial election and then let's see how they like 3rd or even 4th party status, maybe even Mr Hansen will eventually have to eat a little "crow pie".