[mr.x]

Colin Hansen, Finance Minister, delivered this years first budget update since May this afternoon in Victoria. The BC Government will overspend its revenues by $2.8 billion this year, ministry expenditures will fall by $500 million over the next three years and BC will run a deficit for the next four. A surplus is imagined by 2013.

http://www.cbc.ca/gfx/images/news/photos/2009/09/01/bc-090901-cp-bc-budget-hansen_584.jpg
Premier Gordon Campbell, right, applauds as Finance Minister Colin Hansen tables the B.C. budget in Victoria Tuesday. (Darryl Dyck/The Canadian Press)


Hansen anticipates another deficit next year of 1.7 billion dollars, and a further 945 million the next. There would be a 140 million dollar shortfall in 2012, and a return to a balanced budget in 2013. By that time, the provincial debt will be 52.8 billion dollars…18 per cent of the province’s gross domestic product.

The new forecast is for total government revenue to hit $37.6 billion, while expenses are forecast to hit $40.1 billion, combined with a forecast allowance of $250 million to give the estimated deficit of $2.78 billion.

http://www.cfax1070.com/newsstory.php?newsId=10380


Healthcare & Education

Despite the massive deficit, government spending in the 2009-2010 September update is largely characterized by tinkering rather than sweeping changes to most provincial spending, commentators who saw advance copies said.

Funding for health care is forecast to rise $2.4 billion this year, and a total of 18 per cent over the next three years, said Hansen.

The increases in heath-care spending will be paid for in part by a hike in Medical Service Plan premiums of up to $3 per month for single people and $6 a month for families. But about 180,000 low-income earners who are eligible for premium assistance will see their fees eliminated or reduced, Hansen said.

The government will also boost funding for social assistance by $420 million in anticipation of more people losing their jobs as the recession continues to batter B.C.'s export-dependent economy.

Overall funding for education at all levels will rise by over $400 million, to $10.9 billion, including $150 million to roll out full-day kindergarten for five-year-olds in 2009 and 2010, and about $400 million in extra funding for postsecondary institutions.

But funding for elementary and secondary schools will remain relatively flat.



HST

The personal tax credit will also be increased to $11,000 from $9,373, giving B.C. the lowest provincial personal tax rate in Canada for those earning under $118,000, while the small-business tax threshold will also be raised from $400,000 to $500,000, cutting an estimated $20 million from their share of the tax bill.

The government also plans to eliminate the small-business tax entirely by 2012.

Hanson defended introduction of the controversial harmonized sales tax, saying that in two or three years most consumer items will be priced lower than they would have been. He also said taxpayers will get some relief from the coming HST when it is introduced in July 2010 with a tax credit for low-income earners and rebates on residential fuel bills.

HST rebates will also be offered to municipalities, charities, non-profits and new housing, said Hansen.


Income Tax Breaks

"SO TODAY I AM ANNOUNCING THAT THE PERSONAL ...UH...TAX CREDIT...FOR INCOME TAX CALCULATION, WILL BE INCREASED TO ELEVEN THOUSAND DOLLARS. THAT IS UP BY ONE THOUSAND SIX HUNDRED AND 27 DOLLARS PER PERSON. I AM ALSO ANNOUNCING TODAY THAT WE ARE GOING TO BE PROVIDING A FULL REBATE OF H-S-T FOR RESIDENTIAL ENERGY COSTS"

http://www.cfax1070.com/newsstory.php?newsId=10383



MSP Premiums to rise 6%

January 1, 2010 you will pay 6% more for your MSP. How much you pay is obviously dependent on your income. Hansen says this is not a one time increase and as government expenditure increases on healthcare, MSP rates will keep pace.




No HST break on booze

There’s a paragraph on page 85 in the provincial “budget and fiscal plan” concerning tax on the private sale of used vehicles.
Since they are not currently subject to the federal G-S-T, you might expect they will not be subject to H-S-T…and you’re right. They will not. But the seven per cent provincial sales tax will not come off… same thing applies to private sale of boats and airplanes.

Similarly, there will be no saving for the consumer when the provincial tax on liquor drops from ten per cent to seven, as part of the harmonized tax. Government is simply increasing its mark-ups to ensure that the shelf price…and government liquor revenues…remain constant.

[whatnext]

CTV reports that Gordo and Hansen were forced to admit they lied, when they said they had no idea of plunging gov't revenues during the election. Shame on them and those who blissfully drank their Fudge-it Budget Kool-aid.

[Yume-sama]

Did the opposition know, too, (like legitimately, not just taking the opposite stance as usual) or were they each as ignorant as the other :P?

[whatnext]

Did the opposition know, too, (like legitimately, not just taking the opposite stance as usual) or were they each as ignorant as the other :P?

I doubt it. Even now Hansen is trying to backpedal, saying he only heard revenues might be off $200-300 mil, and that was just in a "casual conversation" with the Deputy Finance Minister.

Gimme a break, this buffoon is supposed to be managing billions of dollars of our money, and he's that out of touch with revenue figures!? :koko:

[mezzanine]

Anyone know what will happen to translink/evergreen line funding? I haven't heard anything, so it sounds like existing provincial funding will be kept. The upcoming desicion about the level of funding AFAIK is up to the mayor's council in October.....

[Stingray2004]

Hansen admitted that halfway during the election, his deputy minister of finance stated that revenue outlook had plunged between $200 - $300 million representing under 1/2% of the ~$40 bilion budget. A $495 million deficit was still doable with $200 - $300 million in cuts.

Now let's look at what an NDP budget would look like, shall we? ;)

$2.8 billion (current deficit projection) +
~$500 million (cuts in ministries) +
~$750 million (in federal HST transition funds) +
~$3 billion (NDP increased debt election platform)

And that adds up to a deficit of around $7 billion. Damn, BC needs an NDP guvmint!:D

BTW, the 3-year projection under the budget update still includes ~$24 billion for capital projects inclusive of the SFPR, PMB, Evergreen Line, etc.(the retractible roof for BC Place Stadium is still under review)

[Stingray2004]

Did the opposition know, too, (like legitimately, not just taking the opposite stance as usual) or were they each as ignorant as the other :P?

Yeah, when the budget was presented in February, the NDP complained that the the budget revenue estimates were too optimistic. The Green Party did as well and ignored them in their platform. The nutty NDP? The revenue estimates are too optimistic... but we'll use 'em as a basis for our figures!;)

Yep, the same NDP that promised to "Axe the Tax" before the campaign but now promises to keep it and make it better. Politics as usual.:yuck:

[ravman]

Yeah, when the budget was presented in February, the NDP complained that the the budget revenue estimates were too optimistic. The Green Party did as well and ignored them in their platform. The nutty NDP? The revenue estimates are too optimistic... but we'll use 'em as a basis for our figures!;)

yeah, but if we were to "create" new numbers, all you pple would be like where are they getting these numbers from?


The HST was not talked about during the election and thus it would be irresponsible to talk about this as a problem for the NDP.

when it mattered, when the public gave their vote, The liberals projected 495 million deficit and the NDP projected a 3 billion dollar deficit based on their projected spending on projects.... if they had seen that revenues were tanking, i would assume they would delay some project and such.... No one mentioned the HST.... and no one mentioned that the GOVT PROJECTED REVENUES were FUDGED and not meeting targets, days before the election.... get this fact in your head.... when the budget was released, gordo et al said this is what we THINK will be the outcome. the NDP said this is being optimistic, but those were the numbers the finance ministry gave and gordo used whatever was given to him by his buddies.... the NDP is now forced to accept that whatever Gordo's buddies says interms of revenue and expenses is true and that is what they based their budget on. and then they made the neccessary changes that they wanted to implement....

[whatnext]

Hansen admitted that halfway during the election, his deputy minister of finance stated that revenue outlook had plunged between $200 - $300 million representing under 1/2% of the ~$40 bilion budget. A $495 million deficit was still doable with $200 - $300 million in cuts.

Now let's look at what an NDP budget would look like, shall we? ;)

$2.8 billion (current deficit projection) +
~$500 million (cuts in ministries) +
~$750 million (in federal HST transition funds) +
~$3 billion (NDP increased debt election platform)

And that adds up to a deficit of around $7 billion. Damn, BC needs an NDP guvmint!:D....)

One could assume the NDP wouldn't have passed Gordo's reckless income tax cuts, and left provincial finances hingeing on something as volatile as gas revenues.

[deasine]

In terms of provinces in the red, BC has the best numbers so far.

[mr.x]

In terms of provinces in the red, BC has the best numbers so far.

I'm gonna have to admit it's not the best in terms of per capita.

[WarrenC12]

I'm gonna have to admit it's not the best in terms of per capita.

We look good against Alberta, and possibly the Feds, but I'm surprised Ontario isn't in more trouble.

[Stingray2004]

Natural gas prices are the killer to the bottom lines of both BC and Alberta. In Alberta, oil royalty revenue is relatively paltry compared to natural gas royalty revenue.

Yesterday, the spot price for natural gas was was $2.25 per MMBtu, the lowest in almost 7 1/2 years since February, 2002.

Compare that to the peak of approx. $14.00 per MMBtu in the aftermath of Hurricane Katrina in the fall of 2005.

For every $1.00 change upward in the price of gas/MMBtu, the provincial treasury rakes in another approximate $300 million. If the natural gas price was sustained at the Hurricane Katrina peak today, the provincial treasury would rake in an additional approximate $3.5 billion/annum!

Natural gas prices have bottomed out and are expected to move upward in the new year. And more interestingly, due to the massive Montney and Horn River shale gas plays, BC is potentially poised to overtake Alberta in natural gas production in 5 years.

In other positive news today, full-time employment increased by 24,800 positions in August in BC, with overall employment increasing by 8,600 positions in BC.

That's good positive stuff.