The British Columbia government is sticking to its plan to balance the budget before the May 2013 election, but it will raise taxes and increase debt to do it.

The plan also includes selling $475 million worth of government assets, including the liquor distribution services, to the private sector.

"Politicians will be judged by what they do," Finance Minister Kevin Falcon said while presenting the budget to reporters and stakholders at Victoria's conference centre. In most years since 2001 the government has exceeded its budget targets, sometimes by large amounts, he said.

The one exception was the 2009-2010 budget that was presented as balanced ahead of that year's election, but was off by $1.3 billion and turned into a deficit afterwards. "Nobody is happy to be off, especially by that amount," said Falcon.

He made the observation as he presented a budget with another election on the horizon. It includes a $968 million deficit for fiscal 2012-2013, more than double what was projected in May, 2011, followed by a return to surplus in 2013-2014.

That surplus is projected at $154 million. To get there the government will cancel a cut to the small business tax rate, keeping it at 2.5 percent instead of dropping it to zero as planned. It will also raise the corporate tax rate one percent to 11 percent, starting down a path NDP Leader Adrian Dix had proposed of rolling back corporate tax cuts.

The change on the small business tax rate will raise about $540 million over two years, while the corporate tax increase will raise $49 million in 2013-2014.

It also plans to raise $475 million by selling "surplus assets" such as parking lots or unused building sites. "Additionally, government has recently announced its intention to sell its Liquor Distribution warehousing facilities and associated distribution services to the private sector," the budget and fiscal plan said, though the government had not in fact previously made that announcement.

Falcon said 40 percent of the properties included are in the education system. There are also plans to sell a parking lot near the legislature and a property that had previously been intended for a hospital in Surrey.

"If we are doing better . . . the corporate tax increase will come off the table," said Falcon. "My goal is we won't have to do that, but we're putting it in as an extra measure of prudence."

When the government sells the liquor distribution system it will make sure union workers are protected in the deal, he said. "It's an opportunity for us to get out of a business we don't need to be in."

The plan sets the forecast allowance, intended to allow for economic volatility that will affect the province's books, at a lower level than in recent years at $200 million for 2012-2013 and $250 million for 2013-2014.

It also sets aside $300 million for contingencies and new programs in the year ahead of the election.

In 2013-14 the province's total debt will be $62.7 billion, or about 18.2 percent of the provincial GDP. That's an increase of $2.3 billion from the $60.4 billion projected in May, 2011.

Teachers are in negotiations with the government right now and other public sector unions have their contracts coming up in the next year. The budget anticipates no increases as a result of those negotiations. Said Falcon, "There is no money in this plan for additional wages, in case anyone had any doubts about that."

The budget raises Medical Services Plan premiums, a tax of a type that B.C. is the only province to levy, by four percent. It had previously been raised by six percent in each of the past three years.

It also creates tax credits for children's fitness and arts on up to $300 that match similar federal credits, a $10,000 credit for first time new home buyers and a $1,000 home renovation tax credit for seniors.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.