B.C. loses $3 billion in three months

Tom Fletcher - BC Local News Published: August 19, 2009 2:04 PM

VICTORIA – In his latest effort to defend the move to a harmonized sales tax, Finance Minister Colin Hansen has offered a rare preview of his upcoming budget. Heading into a cabinet meeting Wednesday, Hansen rattled off a series of current revenue and expense figures that would normally be kept under wraps until he delivers his budget update on Sept. 1. They add up to about $3 billion lost to the B.C. treasury since May. "In the last three months we have seen our projected revenues from corporate income tax and personal income tax erode by a billion dollars for this fiscal year alone," Hansen said. "We have seen our projected revenues from natural gas erode by almost $500 million in the last three months alone."We have seen our projected revenues from other natural resources erode by about $500 million. We have seen our projected revenues from the social services tax erode by about $200 million. And that's just the revenue side."

On the expense side, Hansen said the forest fire fighting cost for this season is now expected to be more than $400 million. The figure in his February budget was $60 million.Social assistance costs have jumped by another $100 million as jobs have been lost and people have exhausted their Employment Insurance benefits."We are desperately trying to maintain the critical services in health care, education and social services, and we need to make sure that we have a solid tax base that's going to support that," he said. He also confirmed that there will be cuts to discretionary grants in the September update, but gave no specifics.

Hansen rejected suggestions that the B.C. Liberal government promised not to implement the HST in the spring election campaign.The issue is reviewed annually and as of the February budget it was not approved, he said. That changed only when analysis was done on Ontario's decision, and the federal government's insistence that it be done by next July, he said.