POLITICS

Balance The Budget Website Unveiled By B.C. Liberals

01/10/2012 05:06 EST | Updated 03/11/2012 05:12 EDT
VANCOUVER - The B.C. Liberals erred and are aiming to atone for the deep cuts they made to arts funding when the global downturn hit, the finance minister said Tuesday as he painted a picture of the province's economic outlook for the new year.

Kevin Falcon said arts and cultural groups got the short end of the stick when the government tried to exert fiscal discipline three years ago.

"In retrospect, it was a mistake at how aggressively we did that," he told a Vancouver Board of Trade luncheon, noting he believes the sector is a "big economic driver." His speech outlined steps the government will take towards reaching a balanced budget in 2013-14.

"I start from a position of looking favourably to the sector."

Falcon's comments come a month ahead of the provincial budget and a day before Premier Christy Clark outlines the government's response to a review of how gaming grants are spent. It's believed the report will be released at the announcement.

The minister said the government has already put $15 million back into the sector, although a group representing hundreds of organizations in the arts community said there's still no sense of a "full and lasting commitment" to its full restoration.

However, Rob Gloor, executive director for the Alliance for Arts and Culture, said if Falcon is hinting at increased investment, that would be welcome news.

"That may be an indication of some new perspective coming through the budget," he said.

"I also recognize pre-budget a lot of things are speculation, and anyone's comments from government being non-specific are really a wait-and-see kind of message."

Funding to B.C.'s Arts Council was slashed by more than half in 2008-2009, with the government later injecting a $7 million top-up in September 2010 as money from the 2010 Sports and Arts Legacy.

Additional funding could be a boon to the tourism industry, said Helmut Pastrick, chief economist with Central 1 Credit Union. But he noted the sector is not a large one to begin with.

"I don't think we'll ever become Hollywood," he said.

But Pastrick said Falcon's overall assessment of the coming year's finances and projections for growth are "reasonable" and agreed the province is "well-positioned."

The government is internally forecasting what Falcon characterized as a "conservative" two per cent GDP growth rate. The minister said the main bright spot for B.C. is its export market, which has bucked expectations.

Tying the economy to growth in the Asia-Pacific and keeping the corporate tax rate to the second lowest in the country has also contributed to the rosy picture.

Returning $1.6 billion to Ottawa for ditching the HST will create some economic drag, Falcon said, but noted he will reveal details in coming days on a plan being hashed out with the federal government to ease the shift.

"My hope is although we have to book the entire obligation now, I'm hoping that on a cash-flow basis we can manage it by paying it over more than one year," he told reporters.

During his speech, Falcon noted his ministry is launching an online budget simulator that will help demonstrate what's required when shuffling the public purse.

He also unveiled an expert panel that will provide the government advice towards streamlining the re-introduced provincial sales tax and make business taxes more competitive. University of B.C. chancellor Sarah Morgan-Silvester will be at the helm.

Falcon re-iterated the government will not be offering new money for wage increases when settling upcoming contracts with public sector employees.

NDP Opposition finance critic Bruce Ralston, who attended the luncheon, said it struck him that Falcon didn't once mention the premier's much-lauded jobs plan during his nearly 30-minute speech.

"So I'm really wondering what the message is in that, that he has no confidence in the so-called jobs plan?"