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BC Budget cuts government jobs, steady on health and education

There will be job losses in British Columbia's already lean public service and wide cuts to most ministries to fund increased spending in health and education, according to the budget Finance Minister Colin Hansen presented today.

There will be 4,142 fewer people working for the government by 2013 than there were in 2008, according to the budget documents. That's a shrinking of 13 percent, and at least some of the decrease will come from lay-offs.

As the document puts it, “Despite expected natural attrition, some involuntary staff reductions will likely be necessary in 2010/11 and 2011/12 to ensure government manages within annual budget targets and achieves a balanced budget by 2013/14.”

The province has laid off five hundred since September with another 1,000 to come over the next few years, a staff member told reporters on background, though Hansen later said it's impossible to put a figure on it. The “overwhelming majority” of staff reductions have been through attrition, he said. For people in jobs that are cut, he added, “We will work very hard to help them find another alternative position in the public service . . . Our goal is to keep the number of absolute layoffs to an absolute minimum.”

The job cuts are part of the government's efforts to balance revenues and expenses by fiscal 2013-2014. The documents show a deficit of $1.715 billion in 2010-2011, which is in line with what was projected in September.

While revenues have dropped off during the economic downturn, something frequently mentioned by Hansen and premier Gordon Campbell, spending has continued to increase, though Hansen pointed out in his speech that the rate of growth has slowed.

Even since the September budget update, corporate income tax is off by a further $252 million, natural gas royalties by $190 million and HST rebates have added another $227 million expense. On the plus side the province is picking up $311 million more in transfers from the federal government and this fiscal year will include $395 million of the $1.6 billion in federal compensation for adopting the HST.

The documents also show that the province received $250 million of that compensation in 2009-2010, instead of the planned $750 million. The shift was because of the federal government's cash flow, said Hansen. “It's not something we have unilateral say over.”

At the same time expenses have grown by $460 million, including a further $105 million for school districts, $31 million for post-secondary institutions and $34 million for health authorities and hospital societies.

The budget adds in $35 million to the LiveSmart program and $100 million for what the documents describe as clean energy initiatives.

It also increases the forecast allowance for the year to $300 million. That's more than the $250 million previously planned and much more than the zero allocated in last February's pre-election budget, at a time of great economic volatility, but still much lower than the $750 million that was standard a few years ago.

Ministries receiving cuts include agriculture and lands, citizens' services, energy, mines and petroleum resources, finance, forests and range and labour. The healthy living and sport ministry also sees a cut, much of which appears to be the winding down of the 2010 Olympic and Paralympic Games secretariat.

The province will move $320 million from the resource ministries into health and education, Hansen said. Some of the savings in the resource ministries will come from consolidating some services, he said.

Hansen also released more details on the propety tax deferral for families announced in the throne speech three weeks ago. Starting in July people who own at least 15 percent of the equity in their home and who have children under 18 years old living at home will be able to defer their property taxes. The province will pay municipalities for the deferred taxes and will charge the home owner interest at the prime rate, he said.

The Housing and Social Development ministry's budget showed a decrease in spending on housing and employment programs, despite an increase in the amounts spent on disability and income assistance.

The Crown agency B.C. Housing, however, has seen its budget go up to $900 million from $627 million last year, with a provincial contribution four times what it was a few years ago.

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

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