It’s a budget for tough times.
B.C.’s "recession budget" steers the province through an economic crisis, with a New Deal stimulus package, tighter spending on services and no tax hikes.
It will also plunge B.C. into red ink, with a budget deficit for the next two years.
And it also hikes the province’s debt, to fund hundreds of infrastructure projects around the province and create thousands of jobs.
“It all comes down to one word: Confidence,” said B.C. Finance Minister Colin Hansen this afternoon. “You want to feel confident so you can move forward — and that’s what this new budget is all about."
Hansen stuck with his old shoes as he made the announcement in the B.C. legislature in Victoria, instead of buying a customary new pair.
B.C.’s economy is expected to be in recession for the coming year, shrinking by 0.9 per cent, due to falling housing starts, rising unemployment and poor consumer confidence.
The latest third-quarter finances show that projected revenues in the current fiscal year are a minute $50 million more than expenses, barely at break-even.
Revenues are expected to decline a dramatic $6.6 billion over the next three years, due to falling oil, natural gas and forestry revenues and $4 billion less tax revenue.
Overall, program spending will increase $2.8 billion over the next three years, partly funded by $1.9 billion in administration savings.
In a bid to stimulate the economy, the province is spending $14 billion until 2012 on various capital and infrastructure projects which, it’s hoped, will create 88,000 new construction jobs.
The stimulus package includes:
• $2 billion for ‘shovel-ready’ projects around the province.
• $1.3 billion for school renovations and seismic upgrades.
• $1.7 billion for college and university projects.
• $2.5 billion for healthcare facilities.
• $2.3 billion for transportation projects.
The government is increasing spending on health care by $4.8 billion over three years, accounting for 90 per cent of all new service spending.
In the coming year, a mere $70 million extra is going into K-12 education, and post-secondary is getting $71 million more this year. Social services will get an additional $119 million this year.
The government will run a deficit of $495 million in the coming year, and $245 million in 2010-11, before returning to balanced budgets the following year.
Last week, the government voted to "break" its own balanced-budget law for two years.
Victoria is also borrowing $9.7 billion over the next three years, bringing the provincial debt burden to $47.2 billion.
In the public service, the government is saving $1.9 billion from programs over the next three years.
It’s also cutting back on travel, professional services and advertising. Some 33 senior executive positions are to go, but no layoffs were announced for the 30,000-strong public service.
“What B.C. families are looking for today is a sense of responsibility from a provincial government,” Hansen told reporters. “Governments need to live within their means.”
“This budget is about three things. It’s about stability for B.C. families. It’s about jobs for B.C. families. And it’s about confidence.”
The revenue-neutral Carbon Tax won’t be as billed, as the current year’s $300 million revenues were exceeded by $495 million in tax cuts.
But next July’s Carbon Tax increase still goes ahead, adding another 1.17 cents to a litre of gasoline and 1.35 cents to a litre of diesel and home-heating oil.
Tobacco taxes are also going up, from $35.80 a carton of 200 cigarettes to $37, the same as Alberta.
The government books show $365 million has been allocated to the B.C. Place facelift project over the next three years. Hansen said the project will eventually finance itself totally through condo sales.
And the financing of the $3-billion Port Mann Bridge upgrade, along with the final Olympic security budget, estimated at $1 billion, were not clarified in the budget, and B.C. taxpayers' share wasn’t disclosed.
B.C. taxpayers already got a five-per-cent personal income tax cutback in November, along with a freeze on property tax assessments and a property tax deferment program.
Hansen said he’s optimistic that B.C. can lead the country in job growth in the coming years, if the U.S. economy recovers, and exports to Asian markets expand again.
But he also admits that the picture could get worse, not better, with a continued world downturn, and he’s set aside $385 million in 2009-10 for contingencies.
Hansen said he predicts B.C.’s economy will rebound in 2010, with 2.4-per-cent growth.
The Winter Olympics, he said, could bring in $10 billion to the B.C. economy, which will mean new jobs and opportunities.
The government’s Olympic budget is unchanged at $600 million.
“The last five months have been difficult. And the coming months will be just as challenging,” said Hansen.
“But I have every confidence that B.C. is well positioned not only for recovery, but for a whole new stage of growth.”
http://www.theprovince.com/Business/...tml?id=1299050 
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