The B.C. government is restricting spending increases and keeping its small business income tax alive to meet its balanced budget target before the 2013 election.
Finance Minister Kevin Falcon presented his first budget Tuesday, with a deficit of $969 million for the fiscal year starting April 1, as B.C. pays to end the harmonized sales tax. His three-year plan predicts a $154 million surplus in 2013-14 and $250 million surplus the following year.
To do that, the budget aims to hold government spending growth down to two per cent for three years, with most of it going to health and education. That leaves most other ministries with little or no increase for inflation, a restriction that is expected to reduce overall B.C. government staff from about 27,000 this year to 25,000 by 2014-15.
Falcon also reversed course on business taxes. The government has been promising for years that it would eliminate the small business income tax this spring, after lowering it to the current 2.5 per cent. Now it will continue at 2.5 per cent until B.C.’s financial picture improves.
Falcon is also considering a one per cent increase in the general corporate tax rate to 11 per cent, but not for another year depending on financial conditions. That move positions the B.C. Liberals politically for an election against NDP leader Adrian Dix, who has called for a corporate tax increase.
Stikine MLA Doug Donaldson suggested that the finance minister did the best job he could but added that his ‘boss’, Christy Clark, has no solid vision for the future of the province.
He slammed cutbacks in the budget in the Ministry of Advanced Education, pointing to the Industry Trade Association in particular which has a $9 million cutback, he said.
“When we’ve got a college like Northwest Community College that’s struggling financially, I was hoping to see more emphasis on the skills training that’s needed,” said Donaldson.
He said he’s not suggesting every ministry needs to see more funding but that with the prospect of further increased spending on resource extractions in the north a jobs plan is needed to give local people the skills to work.
“If you don’t have that then a jobs plan is next to meaningless unless you’ve got the training component,” he said.
He also noted that nothing was mentioned about forestry in the budget, a fact he said he found shocking.
– With files from Tom Fletcher
