British Columbia will run a deficit for the next two fiscal years, Finance Minister Colin Hansen said Monday afternoon in Vancouver. Hansen blamed falling prices and shrinking markets for lumber and natural gas, two of the largest exports for the province, for the decline in provincial revenues. He also pointed to declining consumer spending and housing sales, and rising unemployment, for lowering revenue forecasts. Just last November, Hansen had predicted that B.C. would duck the looming global recession without running a deficit, maintaining economic growth of about 0.6 per cent. Hansen said the revised forecasts now predict no economic growth for the province in the coming year, with improvements coming in 2010 due to the economic stimulus of the Winter Olympic Games. Premier Gordon Campbell said the severity of the global financial crisis made it impossible to run a balanced budget without slashing important health-care and education funding. He said his government would recall the legislature early next week to table a bill that would suspend current legislation that requires the Liberal government to present a balanced budget on Feb. 17. Campbell said the government would be looking to cut spending in some areas, including reducing the executive ranks of the B.C. civil service by 20 per cent.
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