VICTORIA - Finance Minister Kevin Falcon says he plans to introduce a tight-fisted budget on Tuesday that holds the reins on spending during turbulent economic times and helps pave the way for a balanced budget next year, an election year.
His message heading into budget day is somewhat more positive than his tone last fall when Falcon provided an economic update that included a budget deficit forecast of $3.1 billion and public suggestions that British Columbia may not reach its legal balanced budget target for the 2013-2014 budget year.
But he's been sounding more confident lately, suggesting that holding tight on Tuesday's budget and emerging signs of economic improvements will allow him to balance the books over the next year.
"We are going to make sure we continue our tradition of being fiscally disciplined to ensure we get back to balanced budget in 2013-2014 and retain our triple-A credit rating, the highest a government can receive," Falcon told The Canadian Press.
Falcon said the government won't be slashing programs in the budget, but he suggested there won't be much in terms of spending increases either.
"We're not going to do that," he said. "We will protect critical spending as we always have in health care and education, but we are going to maintain discipline right across government."
The government recently increased spending by $40 million for its maligned program to help disabled adults and added $15 million for community gaming grants, but it's sticking to its pledge not to give striking B.C. teachers a wage increase, which the employer costs at $2 billion.
Many other B.C. public service worker union contracts expire this year, and so far, the Liberals have suggested they are open to some kind of wage increase, but without increasing overall spending.
The B.C. Government and Service Employees Union said it will be looking for the Liberals to invest in public services after a decade of cuts that have left many branches of government unable to deliver important public services to British Columbians.
The union said inflation has eroded its members' spending power by five per cent.
The Liberals have launched several high-level reviews of the justice system and seniors care, but finding innovative, cost-saving solutions appears to be the approach as opposed to increasing spending.
"There's a new reality for governments in the world today," said Falcon. "The new reality is that fiscal discipline and responsible financing are going to be important underpinnings of how governments are going to be viewed by the investment community, the business community and the marketplace."
He said recent reports about the cost-control issues facing the Ontario government and his trip to Europe last fall where he received an up-close view of the debt crisis in meetings with European investors and financiers, convinced him that British Columbia needs to hold tight for next little while.
"Those voices out there that think the answer is to borrow more, spend more and tax more are not looking at what's happening around the world in the United States and across Europe and even in Canada with government's that followed that approach and are now reaping the whirlwind."
Falcon said the Opposition New Democrats are preaching the European solution, planning to increase spending and raise taxes.
"The NDP and the leader of the Opposition have already got $15 billion worth of spending commitments they've talked about," he said. "They've already committed to raising business taxes, small business taxes, bringing back a corporate capital tax; exactly the road map that was in place in the 1990s but also exactly the road map we've seen in other jurisdictions, including this country that are now leaving governments very vulnerable."
But NDP Leader Adrian Dix said the Liberals are fixated on pointing out what they consider are the economic foibles of others, including Canadian jurisdictions, but they fail to look at themselves.
"Hopefully, we'll see some action to deal with the damage they've caused the economy," said Dix, who also pointed to an overcrowded court system, mismanaged forest inventory and the social and economic turmoil caused by the Liberals' introduction of the controversial harmonized sales tax after the May 2009 election.
"Now after they have caused the damage, they are trying to run around trying to deal with their own situation and calling that reform," Dix said. "We're seeing this on forestry, we're seeing this on criminal justice and we're seeing this on the HST."
Falcon introduced measures on Friday that set the foundations for the province's transition from the HST to the old seven-per-cent provincial sales tax by April 1, 2013.
He introduced temporary transition relief, effective April 1, 2012, designed to provide clarity to the housing industry and home buyers, who many feared were closing their wallets until the 12-per-cent HST was no longer in effect.
Falcon increased the HST tax rebate on new homes to $42,500 from $26,250 on new homes up to $850,000 from the previous $525,000.
The 12-per-cent HST, which combines the five-per-cent federal goods and services tax with the PST, was defeated by voters in a referendum last summer.
The tax resulted in former premier Gordon Campbell's early exit from office and tied new Liberal premier Christy Clark to the tax, which she defended up to and during the referendum campaign where voters rejected the HST.