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'Modest' surplus rests on low spending

Finance Minister Mike De Jong's budget projections call for spending to increase by 1.5 per cent overall in the coming three years
B.C. Nurses' Union president Debra McPherson

VICTORIA – Finance Minister Mike de Jong unveiled his government's promised balanced budget Tuesday, bolstered by Crown property sales, increased income tax rates and economic growth expected to continue for three years.

De Jong's projections call for spending to increase by 1.5 per cent overall in the coming three years, with health care spending increases of 2.3, 2.7 and 2.2 per cent over the same period.

"This is not enough even to maintain existing health care services, given the cost of population growth and inflation, not to mention what's needed to make needed improvements," said Debra McPherson, president of the B.C. Nurses' Union. "As a result, health authorities will be forced to continue jamming hospital patients into offices, lounges and other areas not designed for patient care, as well as using hallways to take up the slack."

De Jong argued that the government has already established a track record of containing the rise of health care funding in recent years. His budget also adds a four per cent increase in Medical Services Plan premiums to take effect next January, the latest in a series of increases paid by individuals or their employers for basic medical care.

Business organizations are concerned about a one per cent increase in corporate income tax, on top of the carbon tax on fossil fuels and the end of the harmonized sales tax that provided input tax credits.

Rick Jeffery, president of the Coastal Forest Products Association, said the return of the provincial sales tax amounts to a $140 million tax increase to his members. The forest industry understands the financial pressure and the revolt against the HST, but now needs regulatory reform and skills training from the government to keep it competitive, he said.

The Canadian Restaurant and Food Services Association applauded the end to the HST, projecting a year of growth for B.C.'s 12,000 restaurants once the sales tax on prepared foods drops by seven per cent on April 1.

Finance officials say 16 Crown properties to be marketed this year are expected to produce a net return of $260 million. They include a former hospital site on 152 Street and two vacant lots on 192 Street in Surrey, a vacant lot near Victoria General Hospital, and the former location of North Saanich Middle School.

The government expects to finish the current fiscal year with a deficit of $1.2 billion, the fourth straight deficit since the global economic meltdown that unfolded before the 2009 election.