British Columbia politicians returned to work unexpectedly Thursday with a promise that the province will continue to post surpluses even as economies around the world crumble.
Finance Minister Colin Hansen introduced his Liberal government's economic relief package in the legislature, saying the province will avoid recession.
"None of the leading economists that I have heard from have indicated a forecast of a recession," Hansen said. "Relatively speaking, British Columbia is doing remarkably well."
Premier Gordon Campbell did not mention the word recession, but he supported Hansen's comments about the B.C. economy.
"British Columbia has put itself in a pretty strong position," Campbell said.
"There isn't a sector of the economy that won't feel the impacts but because we have diversified our economy, I think we won't see nearly the impacts that we might have expected. We're still expecting to see some small economic growth this year."
But Campbell warned B.C.'s economy will not be posting growth numbers in the three and four per cent range as in recent years.
In September, the government downgraded B.C.'s economic growth forecast for this year to 1.7 per cent from 2.4 per cent.
"We're going to have to be very prudent to protect the services that we've got," Campbell said.
The worldwide slump has already taken a toll on some other provinces. Ontario qualifies for equalization payments next year for the first time in its history.
Bernard Magnan, chief economist for the Vancouver Board of Trade, said he also believes British Columbia can avoid a recession, but the province will likely flirt with zero growth in the future.
"Will we play with zero growth, potentially?" he said. "We still will be somewhat better off than other jurisdictions."
The government hopes its $485-million relief package, which Campbell introduced in a televised address last month, will help B.C. families fend off the global economic crisis.
The government had cancelled the fall session of the legislature, but politicians returned Thursday to debate the economic plan.
Hansen said the bill will give an earlier-than-scheduled income tax cut from revenues collected from the controversial carbon tax on gasoline and other fuels. He said the cut will mean an extra $70 for most taxpayers and put an extra $144 million into the economy.
The bill would also allow homeowners facing financial hardship to defer their 2009 and 2010 property taxes.
It proposes to protect RRSPs from seizure from creditors and would allow homeowners lower property assessments.
The Opposition New Democrats attacked the government's recent pay raises to high-level bureaucrats, saying they're a sign the Liberals have lost touch with British Columbians who have been left to struggle as the economy sours.
NDP House Leader Mike Farnworth wore a gold medallion that a constituent received from Campbell as an example of wasteful "bling."
"This is a waste of taxpayers' money," he said. "It's a solid medal symbol of how this government is out of touch."
Magnan said the economic incentive bill is a move to provide confidence in the economy.
Hansen said he will introduce an economic update on Monday that drastically reduces the government's forecast of a budget surplus, but beats back a deficit.
Last September, the government was boasting increased revenues and forecasting a budget surplus of almost $1 billion, plus an extra $750-million forecast allowance.
But most revenues have declined in the last two months, cutting deeply into the Liberals' forecast $1-billion surplus, Hansen said, adding the budget won't post a deficit.
Last February, the government forecast a surplus of $50 million for this year. Hansen said the numbers he will release on Monday show a surplus that is more than $50 million, but well below $1 billion.
