British Columbia Finance Minister Colin Hansen tables the provincial budget in the B.C. Legislature in Victoria on Feb. 17, 2009.
B.C.'s Finance Minister says the province will face deficits through 2013, so next week he will bring in legislation to allow deficits to be posted for two years longer than promised in the recent May election campaign.
The legislation will amend the province's balanced-budget law to allow a total of four years of deficits, Colin Hansen said.
This will be the second time the province has amended the law. Premier Gordon Campbell announced in February that his government would amend it to allow Mr. Hansen to introduce a deficit budget. The change allowed two years to get back into the black.
But Mr. Hansen, speaking to reporters at the legislature yesterday, said the Liberals need more time.
"So next week, I will be introducing legislation in the House that will extend the period that the province will be able to table budgets for an additional two years," Mr. Hansen said.
He said the measure will be passed by the Sept. 1 tabling of a planned budget update.
"When the amendments are passed next week, what will be in place is a requirement that the provincial government must be back into tabling a surplus budget for the '13-'14 fiscal year," he said.
Earlier this week, Mr. Hansen indicated that the 2009-2010 deficit, pegged at $495-million during the recent election campaign is headed for an unknown figure in the billions.
Yesterday, he reiterated a commitment to protect health-care services and education, but said, without providing specifics, that the government won't be able to fund "all of the discretionary things that we had funded in past years."
NDP Leader Carole James said Mr. Hansen's announcement shreds any fiscal credibility the government might have had, and suggests that campaigning on a promise that the deficit would not exceed $495-million was deceitful.
The Liberals won a third straight term in that campaign, which was Ms. James's second as NDP Leader. Her party's defeat has raised questions about her own leadership future.
Ms. James said the government's political need drove the numbers and "deceit" during the election. "They didn't want to be up front with the voters," she said.
And Ms. James wondered what additional "surprises" Mr. Hansen may drop before the budget update.
An NDP government, she said, would bring in a stimulus package, kill a planned harmonized sales tax to avoid measures that might slow spending and invest in what she called "essentials" such as health care and education.
She also suggested that the Liberals' promise to bring in a surplus budget for 2013 is a bid for a fourth term.
Political scientist Norman Ruff said the government is in a challenging situation that strikes at its perceived strength as an economic manager.
If the rosy deficit picture was not "deception on their part, it starts to look like incompetence," the professor emeritus from the University of Victoria said in an interview.
"They have egg on their face because of the omelette they tried to make in the spring."
But he noted the government may be gambling that voters will forget about the current situation when they go to the polls in four years.
Ian Bailey