British Columbia cuts deficit projection

Tue Sep 14, 2010 3:30pm EDT
 
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VANCOUVER (Reuters) - British Columbia reduced its estimated budget deficit on Tuesday by about C$335 million to C$1.4 billion ($1.37 billion) for the current fiscal year, as Canada's westernmost province sees its economy strengthening.

Corporate income tax revenue has been better than anticipated for the C$40.6 billion 2010-11 budget, unveiled in March, and provincial economists have raised 2010 economic growth forecasts slightly to 3.1 percent.

"We have some reason for cautious optimism," Finance Minister Colin Hansen told reporters.

Economic growth is still expected to slip back to 2.2 percent in 2011, according to the quarterly economic update released by the province's Ministry of Finance.

British Columbia anticipates returning to budget surpluses in the 2013-14 fiscal year.

The right-leaning Liberal government released its improved budget projections at a time when it is struggling with low poll numbers amid public anger over its decision to merge the provincial sales tax with the federal government's goods and services tax.

A legislative committee agreed on Monday to let the public decide on whether to repeal the harmonized sales tax in a referendum to be held in September 2011.

Premier Gordon Campbell also faces a political test in November when the Liberal Party holds its leadership convention. There have been calls within the party for him to step down because of the HST.

(Reporting by Allan Dowd; editing by Rob Wilson)

 
<p>The downtown core of Vancouver and the Lions Gate Bridge rise above a morning fog in this view from Cypress Mountain in West Vancouver, British Columbia in this November 17, 2008 file photo. REUTERS/Andy Clark</p>