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B.C. deficit forecast grows again
VICTORIA – The B.C. government has increased its deficit forecast for the second time this fiscal year, citing lower revenues from coal sales and continuing low price and sales volume of natural gas.
A slow real estate market has also reduced provincial revenues from the property purchase tax and provincial property tax for schools, Finance Minister Mike de Jong said Wednesday.
De Jong released the finance ministry's second-quarter update, forecasting that the deficit will reach $1.47 billion by the time the fiscal year ends March 31. That's an increase of $328 million from the first-quarter forecast released in September.
The September deficit forecast was up $173 million from last February's budget, attributed mostly to a drop in natural gas prices and sales volume due to oversupply in the North American market. The finance ministry says natural gas prices and revenues have been flat since September, but coal and property tax revenue are driving a drop of $202 million in expected revenues to the provincial treasury since then.
De Jong said despite the slide in revenues, he is still on track to balance the 2013 budget when he presents it in the legislature on Feb. 19. That promise is also featured in the government's current round of advertising to promote its jobs plan.
Speaking for the NDP opposition, MLA Carole James said she does not believe the next budget will be truly balanced, despite a plan to sell government assets that she likened to "selling the family farm."
James noted that the forecast deficit has grown by about 50 per cent since the last budget, and the B.C. Liberal claims of strict spending control are contradicted by spending $15 million on ads that mainly promote the B.C. Liberal party in the run-up to the May election.
In September, De Jong announced a government-wide hiring freeze and restrictions on travel and other discretionary government spending. Wednesday he said $176 million in savings have been identified.