The B.C. government estimates its budget deficit for this year will be $2.8 billion.Finance Minister Colin Hansen delivered the news as part of his budget speech this afternoon. He also predicted deficits of $1.7 billion in 2010/11 and $945 million in 2011/12.The government will have to pass amendments to its balanced budget law to allow for the deficit spending.“We are taking steps to protect the critical public services British Columbians rely on, to promote new investment and growth in our economy and move forward with long-term initiatives that will improve the quality of life throughout the province,” said Hansen. “But to achieve these goals during a time of dramatically falling provincial revenues, additional deficit spending is required.”
The government says health funding is increasing by nearly 18 per cent over the next three years, reaching $15.7 billion in 2011/12.To help pay for increase, Medical Services Plan premiums are going up about six per cent or a maximum of an additional $3 per month for individuals and $6 for families.
Education funding is slated to stay steady at about $8,200 per student. The government also pledged $151 million to provide full day kindergarten for 50 per cent of five-year-olds starting school next year and for all five-year-olds by September 2011.Hansen said the government will spend an additional $420 million over three years to meet the increased demand for income assistance brought on by the recession.
The B.C. Liberals are touting the implementation of the harmonized sales tax as a measure implemented to make B.C. one of the “most competitive in the world,” according to a press release that accompanied the budget.“According to leading economists, harmonizing the PST and GST into one tax is the single biggest initiative that British Columbia can do to stimulate the economy,” said Hansen. “The HST will remove over $2 billion in costs for B.C. businesses, generating new investment and ultimately creating more, better-paid, long-term and stable jobs for British Columbians.”Hansen said he recognized the HST would hit the restaurant and tourism businesses hard and pledged to work with those industries to mitigate the tax’s negative effects.
And to help offset the effect of the tax on individuals, Hansen announced the basic personal income tax credit -the amount of income people are not taxed on- will increase 17 per cent to $11,000. As well, Hansen announced that home heating bills will be exempt from the HST,Hansen also said the government intends to growth in spending on government services to zero for the next three years, after adjusting for inflation an population growth.“This is a very tight budget, it is belt-tightening not just one year, it’s over the three years of the plan,” Mr. Hansen said during a briefing with reporters in Victoria. “In some cases programs that would have been nice to do, we’re simply not going to be able to do over that period of time.”
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Don Quixote Note: If the note on home heating bills will be exempt from the HST (and it is confirmed by Globe and Mail) is correct than instead of a 7% increase as feared than the home heating bills will be reduced by the 5% GST that is now being charged.
I have been fighting the federal Government for years to remove the GST on Home heating bills and especially the GST that was recently put on the B.C. Carbon Tax that is part of your Terasen Gas Bill.
Hopefully this report is correct.
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