B.C. budget deficit projected to hit $1.14 billion

 CBC News Posted: Sep 13, 2012 7:59 AM PT
B.C.'s budget deficit is projected to hit $1.14 billion this year due to plunging natural gas revenues, B.C.'s new Finance Minister Mike de Jong announced this morning. De Jong says falling natural gas revenues are expected to cost the province $1.1 billion over the next three years. Other natural resource revenues are down as well, meaning the province is facing a total drop of $1.4 billion in projected revenue over the next three years. As a result the government will have to find more than $1 billion in cost savings and cuts over the next three years, de Jong announced at his first quarterly update in Victoria on Thursday. The projected deficit for 2012 alone is up $173 million over earlier estimates and to make up for the loss the government will have to cutting spending by $241 million this year, he said.

Wage and hiring freeze

De Jong says he had been committed to balancing the budget next year, but dropping revenues will make that very tough. To make up for the revenue shortfall, the government will be rolling out spending cuts, freezing salaries for all public sector managers and putting in a hiring freeze for civil servants. He said the government is also reviewing its bargaining mandate with public sector unions and indicated even small wage increases are likely now off the table. That news is likely to trouble government unions, which have been holding one-day strikes in order to push for better wage increases in ongoing contract negotiations. De Jong was appointed finance minister in a cabinet shuffle last week, but his predecessor Kevin Falcon had already warned the province's books were being squeezed by plunging natural gas prices.