Finance committee reaffirms goal to balance B.C. budget
Published Wednesday, November 14, 2012 7:02PM PST
VICTORIA -- British Columbians want the Liberal government to keep its balanced budget promise, even if it means more belt-tightening, says the chairman of the legislature's all-party finance committee.
The 10-members -- six Liberals and four New Democrats -- of the Select Standing Committee on Finance and Government released a report Wednesday containing 29 recommendations for the Finance Ministry, with delivering a balanced budget in February as the top priority.
The committee's report serves as a budget suggestion list to the minister, with the recommendations reflecting the suggestions from a cross-section of British Columbians.
"What the committee heard as we travelled throughout the province was that while maintaining spending for health care and education and other programs that British Columbians see as very, very important, balancing our budget and making sure that we don't pass debt on to our future generations was of significant importance, and, quite frankly, more important than making sure that we deal with the other issues," said committee chairman Douglas Horne.
Two months ago, Finance Minister Mike de Jong said the government would stick to its plans to deliver a balanced budget in February even though huge declines in natural gas revenues are projected to reduce government revenues by $1.1 billion over the next three years.
The revenue declines forced de Jong to revise upward the government's deficit forecast this year to $1.1 billion from its earlier projection of $968 million.
De Jong said the government plans to make up the shortfall with a new round of restraint, which included spending cuts and hiring freezes.
Horne said the finance committee held 19 public hearings across the province earlier this fall and received more than 800 submissions, which will be passed on to the Finance Ministry.
Horne said the committee unanimously supported the government's goal of balancing the budget, while also making recommendations to to improve economic competitiveness and ensure a smooth transition back to the provincial sales tax next April from the harmonized sales tax, which British Columbians rejected in a provincewide referendum.
The report stated it heard strongly from business and industry groups, including the B.C. Business Council, Chamber of Commerce, Vancouver Board of Trade and the Canadian Federation of Independent Business, that producing a balanced budget sends a solid signal to investors that B.C. is a safe haven in troubled economic times.
The committee's recommendations also included working with industry, schools and colleges to train more skilled workers; ensuring the carbon tax undergoes a thorough review and seizing opportunities to streamline the administration of the PST.
Horne said the committee heard during its public hearings that addressing skills training needs involves a government-wide effort that includes education, industry and social agencies.
"Obviously in building the economy in B.C., having skilled workers . . . is something that is going to benefit us all," Horne said.
Tax policy, including the promised return to the former PST taxation system by April 2013, and the future of the carbon tax, were also major public concerns, he said.
In last year's budget, former finance minister Kevin Falcon announced a review of the carbon tax, saying the province must consider that few other jurisdictions have adopted a carbon tax similar to B.C.'s and businesses are concerned the tax puts them at a competitive disadvantage.
The last carbon tax increase, implemented on July 1, 2012, adds about seven cents per litre of fuel.
Members of the Liberal Party shot down calls to dump the tax completely at their recent convention in Whistler, but the finance committee, which last year recommended capping the carbon tax, said the current review deserves a through analysis.