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Province on budget track despite economic risks: Hansen

British Columbia's revenues have decreased and expenses increased since Finance Minister Colin Hansen delivered his last quarterly report, but the province is on track to meet its budget.

The second quarterly report Hansen released today included drops of $284 million in personal income tax revenue, $155 million in natural gas royalties and $100 million in property transfer taxes. Those losses were partially offset by an extra $176 million in corporate income tax revenue and $121 million more than expected from the Harmonized Sales Tax.

Spending projections were up by $62 million since the last quarterly update, made in September, and by $539 million from February's budget.

The projected deficit is $1.695 billion, which is larger than what was projected at the last quarterly update but close to what was budget ted in February. The budget includes a $300 million forecast allowance which has not yet been allocated.

Hansen said that while employment is recovering and exports are increasing, there are major risks to the provincial economy. “We continue to see some real challenges south of the border,” he said. While B.C. is less dependent on the U.S. than other provinces are, roughly half the province's exports go there.

Asked about the province's reversal on a promised 15 percent income tax cut, Hansen said Premier Gordon Campbell's resignation made the difference. “The world changed pretty significantly in that time in terms of B.C. politics,” he said. “Cabinet made the decision that given there is going to be a new premier by the end of February that we should not be implementing significant new measures and one of those significant new measures was the 15 percent tax reduction and that's why it was suspended.”

Hansen said that as finance minister and deputy premier he would refrain from endorsing a leadership candidate, though he might before the Feb. 26 vote. “I don't anticipate that I will be picking any favourite in this campaign anytime soon.”

Nor, he said, does he intend to run himself.

Hansen said he will meet with the province's economic forecast council on Dec. 10 and will present a budget on Feb. 15. The budget will hold the status quo to allow whoever becomes the next premier some flexibility, he said.

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

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