British Columbia sees budget deficits for 2 years
By Allan Dowd
VANCOUVER, British Columbia (Reuters) - British Columbia forecasts it will run budget deficits for the next two years, saying its resource-based economy is being too battered by the global economic slowdown to avoid it.
Premier Gordon Campbell, who had once vowed to never run a deficit, said on Monday the plans will require the Liberal government to abandon a law it introduced that required Canada's westernmost province to field only balanced budgets.
"No matter how politically tough it may be to table a deficit budget, the heart of any budget's credibility is its commitment to telling the public the truth," Campbell told a Vancouver news conference.
The government had thought as recently as two weeks ago it could keep the budget balanced, but doing that would have required cuts to health and education spending that the province was not willing to make, Campbell said.
"It would be a budget that hurts more than it helps," said Campbell, whose right-of-center government faces a scheduled election in May.
Finance Minister Colin Hansen refused to predict the size of the deficits. The province will introduce the budget for the 2009-10 fiscal year on February 17. The budget will return to balance in 2011-12, he said.
The February fiscal plan will include short-term job stimulus programs, but cuts in all areas of discretionary spending, Campbell said.
He said the province will not abandon the carbon tax on energy use that it introduced last year to fight climate change. The tax, which replaced some existing taxes, is the first of its kind in North America. Continued...