February 18, 2013
B.C. budget lowers infrastructure capital spending to eliminate deficit
The 2013 B.C. budget aims to eliminate the provincial deficit in the next fiscal year, by reducing capital spending on the construction of infrastructure and increasing corporate income taxes.
“It looks like the infrastructure budget has not changed drastically since last year, but I don’t find that too alarming,” said Manley McLachlan, president of the B.C. Construction Association.
“The amount of public sector investment in infrastructure over the last 10 years was significant. So, there was an expectation there would be a winding down in this area. We knew the focus was on a balanced budget, which means something had to decline.”
Finance Minister Mike de Jong delivered the 2013 budget in Victoria this afternoon, which he described as a determined plan to hold the line on spending and honour a commitment that the government would not spend more tax-payers money than it receives in revenue.
Total government revenue is forecast at $44.4 billion in 2013-14, $45 billion in 2014-15 and $46.4 billion in 2015-16. Total expense over the three-year plan is forecast at $44 billion in 2013-14, $44.6 billion in 2014-15 and $45.6 billion in 2015-16. As a result, Budget 2013 forecasts a surplus of $197 million in 2013-14, and surpluses of $211 million in 2014-15 and $460 million in 2016-17.
De Jong said in the budget speech that the plan is being implemented in an environment of global volatility and uncertainty on the revenue side, due to a decline in the prices of export commodities such as such as coal and natural gas.
For this reason, he said finding the right balance of measures to balance the pre-election budget books was very difficult.
The 2012 budget predicted total capital spending will be about $7.141 billion in fiscal year 2011-2. However, budget 2013 estimates that total capital spending will drop to $6.767 billion in 2012-3.
This decline will continue throughout the three year fiscal plan with capital spending of $6.227 billion in 2013-14, $6.203 billion in 2014-2015 and $5.853 billion in 2015-16.
This represents a decline in total capital spending of $1.288 billion between 2011 and 2015. The BC government’s third Quarterly Report shows a revised deficit of $1.228 billion in 2012-13.
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