Budget pledges no tax hikes and government 'belt-tightening'

<p>British Columbia will post deficits totalling $740 million over thenext two years and there will be no tax hikes, the province’s Financeminister announced Tuesday.<br /></p>


British Columbia will post deficits totalling $740 million over the next two years and there will be no tax hikes, the province’s Finance minister announced Tuesday.


Spending to health care, education and social services will increase, while other government ministries and Crown corporations will undergo “significant belt-tightening,” Colin Hansen said at a pre-budget lockup in Victoria.


“Our priority has been to protect the vital health-care, education and social programs that British Columbians have come to rely on, and depend on, and have become even more important to us as we go through the kind of economic challenges that the province — and indeed the world — is going through today.”


Budget 2009 predicts a deficit of $495 million in 2009-10 and $245 million in 2010-11, returning to balanced budgets by 2011.

Health-care spending will increase by $766 million in 2009 to $14.1 billion, while education spending will is set to rise $87 million to almost $1.8 billion.

“All ministries,” Hansen said, “have gone through a very significant belt-tightening exercise. We have tried to identify all areas of discretionary spending and find ways to reduce those budgets that do not impact on the direct delivery of those vital health, education and social services.”

The savings, projected at $1.9 billion over three years, will result from a 22 per cent decrease in travel spending and a 76 per cent reduction in advertising budgets. Other savings would be found in attrition, scaled-back hiring and more efficient use of human resources, Hansen said. An additional $250 million in savings will be found by the end of 2011-12.

The budget, however, has risks, including a lack of funding for the next round of public-sector wage negotiations, the majority of which expire in March 2010. It also did not include the financial implications of the $3-billion Port Mann Bridge replacement (the deal will be finalized in March).

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