VICTORIA, British Columbia (Reuters) - British Columbia will balance its books by 2014 by keeping tighter control on spending growth, increasing healthcare premiums and selling some government assets, its finance minister said on Tuesday.
The Canadian province’s annual budget projected a C$968 million ($972.18 million) deficit in fiscal 2012-13 and C$154 million surplus the following year.
The surplus is projected to rise to C$250 million in 2014-15.
“We have really started to bend down the growth in government expenditures,” Finance Minister Kevin Falcon told reporters in advance of delivering his first-ever budget speech for the Liberal government.
The deficit forecast for 2012-13 was pegged at C$2.5 billion, a C$594 million improvement over the province’s most recent forecast.
Much of that deficit is due to the C$1.6 billion the province has to repay the federal government for withdrawing from the harmonized sales tax after residents voted in a referendum last summer to extinguish the combine federal-provincial tax.
B.C.’s total debt is forecast to reach C$57.6 billion in 2012-13, C$62.7 billion in 2013-14, and C$66.4 billion in 2014-15.
Over the next three years, the budget anticipates C$10.7 billion in taxpayer-supported capital spending on such projects as schools, roads and hospitals.
“And there is no money in this plan for additional wages, just in case anybody had any doubts about that,” Falcon told reporters.
In the text of his budget speech, Falcon credited “net-zero” compensation increases in public-sector wages, which account for over half of government spending, with enabling the government to balance the books next year.
The government also plans a 4 percent hike in healthcare premiums, which it said will add C$87 million to the province’s coffers.
The province also expects to generate C$706 million from asset sales. These include its liquor distribution warehousing facilities “and associated distribution services”.
The budget projects modest economic growth of 1.8 per cent in 2012, 2.2 per cent in 2013, and 2.5 per cent in 2014.
The province will also keep its small business corporate income tax rate at 2.5 per cent and hike the general corporate rate by 1 percentage point in 2014-15 if the government’s revenues are less than estimated.
With this budget, the province will also “carry out a comprehensive review” of the carbon tax, Falcon said in the text of his budget speech. That review will examine its impact on every economic sector, paying “particular attention to agriculture”.
Reporting By Keith Norbury; With additional writing by Jeffrey Hodgson