B.C. gov’t slaps lock on spending
Business tax stays until $968-million deficit tamed
Determined to balance the books before the next election, B.C. Finance Minister Kevin Falcon introduced a “disciplined” budget Tuesday that will put a lock on spending, tax small businesses and sell off government assets.
While Budget 2012 offered few surprises, Falcon said he hopes to raise $700 million through the sale of “surplus properties,” including the government-owned liquor distribution warehouses in in Kamloops and Vancouver.
Projecting a deficit of $968 million this fiscal year, and modest economic growth of 1.8 per cent, Falcon said the sale of the properties is expected to help the government hit surpluses of $154 million by 2013-14 and $250 million in 2014-15.
Falcon said the government is also prepared to hike the corporate tax rate by one per cent, to 11 per cent in 2014, but only if the financial situation nosedives.
“We do this with some reluctance,” Falcon said in a speech peppered with the word “prudence.”
To reporters, he later commented: “Everyone has to do their bit.”
The business community offered more pointed feedback. Jock Finlayson of the Business Council of B.C. said: “It’s not something we recommended, and we are not jumping up and down about it.”
The small corporate business tax, at 2.5 per cent, was supposed to be eliminated by 2012, but will instead be frozen. Falcon said the tax will be revisited “only after the fiscal situation has improved,” noting the government remains committed to balancing the budget, as mandated by law, by 2013-14. An election is due by May 14, 2013.
Spending increases were limited to health, education and social services. Health saw an overall increase of $1.5 billion to its operations budget over three years, while education’s “block funding” remained unchanged at $4.7 million per year.
Education will also receive the already-announced $165 million to deal with issues of class composition, which is nowhere near enough, according to Susan Lambert, president of the B.C. Teachers Federation.
“We’re cut to the bone right now,” she said. “We’re talking about more closed schools, crowded classrooms and even less for special-needs children.”
Money was also drawn from the government’s contingency fund — $237 million to the justice system and $144 million to the beleaguered Community Living B.C. Another $294 million was put toward income assistance.
The government will axe the provincial jet-fuel tax for international flights — a move Falcon said will make B.C. more accessible to Asian markets.