B.C. Finance Minister Kevin Falcon.

B.C. on track to balance budget: Falcon

Smaller-than-forecast $1.84-billion deficit includes big one-time HST repayment to feds

B.C. ended the fiscal year with a smaller-than-forecast deficit of $1.84 billion, according to the provincial government.

The deficit would have been $241 million had it not been for the one province’s one-time repayment of $1.6 billion in HST transition funding to Ottawa.

Finance Minister Kevin Falcon predicted the province is on track to return to a balanced budget in 2013-14.

But he cautioned while the 2011-12 results are better than expected, B.C. still faces great economic uncertainty from fluctuating commodity prices and potential economic impacts from the European debt crisis.

“British Columbia stands out globally as a safe harbour for investment because our government continues to keep spending and debt under control,” Falcon said, adding Europe’s plight reflects “the perils of the tax-borrow-and-spend mentality.”

But B.C. Auditor General John Doyle pegged the deficit at $2.36 billion, finding the province understated it by $530 million due to its continued practice of deviating from accepted accounting methods.

Because the government posted a deficit, cabinet ministers lose 10 per cent of their salary. They’re all receiving the other 10 per cent of the legislated 20 per cent pay holdback because their ministries met their targets.

A deficit of nearly $2.5 billion had been budgeted.

B.C.’s economy grew by 2.9 per cent in 2011, third among the provinces and better than the national average of 2.6 per cent.

Retail sales, an indicator of consumer confidence, increased by 3.1 per cent in 2011.

Excluding the one-time HST repayment, government spending was held to an increase of 2.6 per cent, down from the 4.3 per cent budgeted.

The provincial government spent $42.8 billion last year, with an additional $934 million going to health, $67 million to education and $51 million to social services. There were cuts in most other areas to offset the HST repayment.

Nearly $3.6 billion went to capital spending on schools, universities, hospitals, roads, bridges and other infrastructure.

B.C. took in an extra $1 billion in tax revenue last year, half of it from more personal income tax.

The provincial debt climbed $2.8 billion to $50.2 billion.

B.C.’s taxpayer-supported debt-to-GDP ratio – a measure of ability to pay – fell to 16.4 per cent, one of the lowest ratios in North America.

Just Posted

VIDEO: Fuel truck and train collide in Port Coquitlam causing massive fire

More emergency crews are still arriving on scene of a massive fire at the PoCo rail yard.

UPDATE: Pioneer Ave filming to include snow effects, stunt driving and fire arms

Pioneer Avenue to be backdrop for scenes set in 1950s

UPDATE: Rockslide keeps Coquihalla northbound lane closed

Highway 5 is closed in one direction.

UPDATE: Brother of teen killed by stray bullet in Vancouver says the death left a void

Alfred Wong, 15, was gunned down while on his way home from dinner with his family

UPDATE: Wind warning ends for Metro Vancouver after thousands lose power

More than 34,000 BC Hydro customers in the dark on Sunday morning in the Lower Mainland and Sunshine Coast

Week in Review – January 19

Movie filming, water upgrades and more

Back to work: U.S. government shutdown ends after Democrats relent

Short-term spending measure means both sides could see another shutdown stalemate in three weeks

Man lives despite malfunctioning defibrillator at B.C. arena

A middle-aged man went into cardiac arrest after at game at Pitt Meadows Arena last Wednesday.

Cause of Northern B.C. seaplane crash released

TSB releases report on seaplane crash during a water landing in 2016 near First Nations community

Vancouver police crack down on pop-up pot vendors

Officers raided merchants’ tables on Robson Square late Sunday

Bell Media, NFL take appeal over Super Bowl ad rules to top court

At issue is a ban on substituting American ads with Canadian ones during the game’s broadcast

Crown seeks 4.5 years jail for B.C. woman convicted of counselling tax evasion

Debbie Anderson the latest from group to face jail for teaching debunked ‘natural person’ theory

Movie filmed in Castlegar B.C. opens Friday

Hollow in the Land starring Dianna Agron will be playing in select cinemas.

Semi rollover on Highway 3

Highway 3 is reduced to single-alternating lanes

Most Read