Finance Minister Hon. Colin Hansen, unveiled the BC 2010/2011 Budget and Fiscal plan today in Victoria. Budget 2010 projects a deficit of $1.7 billion in 2010/11, and a return to fiscal balance by 2013/2014.
Today’s Budget marks a reversal of declining revenue growth. Revenue growth is expected to average 4.9% annually over the next three years. Projected revenue growth parallels improvements in commodity shipments, especially a turn-around in the forest sector. Increases in spending are almost exclusively dedicated to health and education. The health budget will receive an additional $2 billion over three years, consuming almost all of the Province’s anticipated future spending increases. By 2012/13, spending on healthcare will reach $17.9 billion or 42% of the total budget. Economic stimulus, by way of spending on infrastructure, is forecasted at $20.7 billion over the next three years. This assumes federal contributions of $1.5 billion and reflects a continuation of capital spending levels announced by the Province in 2009.
The Budget commits to achieving cost savings through efficiencies among the Government’s resource and development ministries. Forests, Land Management, Community Development, Energy and Mines, and Transportation will collectively reduce expenditures by $320 million over three years through consolidations and efficiencies. Across Government, the size of the civil service is predicted to shrink by 11% (approximately 3,500 jobs), mostly through attrition, but job cuts will take place.
The Budget introduces new program funding in the following areas:
- $108 million for directed at families and youth of which $60 million will go to a 2010 Sports and Arts legacy;
- $69 million for justice and policing;
- $58 million for community infrastructure;
- $35 million for LiveSmart BC; and
- $100 million for clean energy development funding.
With B.C. leading the rest of Canada in economic performance (with the exception of Saskatchewan), the Government will rely on economic growth to return the Treasury to balance and pay for services, rather than tax increases or significant spending cuts. The Budget predicts the HST will be revenue-neutral after rebates and other considerations are factored in. Meeting Budget goals will require that large-spending departments, such as Housing and Social Services and Children and Families maintain current spending levels.
The Budget also assumes a “net zero” increase to collective agreements currently under negotiation between the Government and the public service. Outside of Health and Education, most Ministries will experience spending cuts over the next three years and some contraction of staff levels. A lively Budget debate should be expected as the Opposition is likely to target flat spending on social services as essentially a cut to essential services.