Opinion

Fiscal hurdles ahead for B.C.

As the Liberal leadership race gets down to its final days, and the new premier is selected by party members, B.C. residents should contemplate the provincial budget, which was released to a collective yawn.

As expected, it contained virtually no new initiatives, as there is no active government in place right now.

Despite the lacklustre budget, there are a few noteworthy points. One is that government debt is rising at a breathtaking rate, with very little of that debt actually due to the current deficit. Most of it, in fact, is for capital projects, with much of that for B.C. Hydro.

The debt could be close to $60 billion by 2013. When the B.C. Liberals were first elected in 2001, the debt was around $34 billion, and it didn’t move much past that figure until 2007, when the government started throwing a lot of money around – perhaps encouraged by the booming economy of the day.

Finance Minister Colin Hansen took pains to point out expected growing revenue from the HST – $4.2 billion in 2010-11 (including PST revenue) rising to $6.5 billion by 2013-14.

But there is no guarantee the HST will survive a referendum scheduled for September, but that could be moved up to June. The old PST, if reinstated, would not bring in as much revenue because it does not apply to as many items.

One leadership candidate, Kevin Falcon, has proposed cutting the HST rate to 10 per cent. And if the referendum gets rid of the HST, the province has to pay $1.6 billion back to Ottawa.

In other words, this budget has a great deal of uncertainty and despite all the political song and dance, B.C. has many major fiscal challenges ahead of it.

— Nanaimo News Bulletin

We encourage an open exchange of ideas on this story's topic, but we ask you to follow our guidelines for respecting community standards. Personal attacks, inappropriate language, and off-topic comments may be removed, and comment privileges revoked, per our Terms of Use. Please see our FAQ if you have questions or concerns about using Facebook to comment.

You might like ...

Liberal leader wows the crowd
 
Fund set up for deceased man’s family
 
James Elliott running for city council
Prince Rupert students complete work on healing and reconciliation gift to government
 
ELECTION 2014: The Education Equation or why you should pay attention to school trustee elections
 
Learning from an industry expert

Community Events, October 2014

Add an Event

Read the latest eEdition

Browse the print edition page by page, including stories and ads.

Oct 31 edition online now. Browse the archives.