De Jong said the Liberal government's second quarterly report projects the deficit to hit $1.47 billion, up from his forecast in September of a deficit of $1.1 billion, but he's convinced if the government cuts up to $300 million from its current budget, it will reach balance next year.
De Jong said despite downgraded B.C. economic growth forecasts by the independent Economic Forecast Council — which provides economic advice to the government — the province's economy is still expected to grow this year and next year, generating revenue for the government.
The forecast council, which met last week in Vancouver, now projects the B.C. economy to grow 2.1 per cent in 2012 and 2.2 per cent next year. De Jong said the Finance Ministry's quarterly report has pegged the B.C. economy to grow 1.8 per cent in 2013.
Premier Christy Clark promised British Columbians her government will balance the books in the budget delivered in February, less than four months before the May provincial election.
De Jong didn't provide a detailed plan on how the government will get there beyond the government's previously announced tightening of discretionary spending and travel and a hiring freeze. But he also didn't rule out increasing taxes or making further cuts.
"There's actually only two budgets," said de Jong at a news conference releasing the government's economic update Wednesday.
"There's deficit budgets and surplus budgets," he said. "It's not just a question of balancing. We're going to have to present a budget that will withstand scrutiny, that will show sufficient surplus as to be credible."
Economist Helmut Pastrick, a member of the forecast council and the chief economist at Vancouver's Central 1 Credit Union, said de Jong's balanced budget goals are achievable, especially considering the budget has a built-in $300 million contingency fund and a $100 million forecast allowance.
He said the government is also expecting to receive $292 million next year from the City of Vancouver when it completes the sale of its Little Mountain property lands next year. The city plans to turn the property in the King Edward neighbourhood into a mixed-use community.
"It's feasible," said Pastrick about de Jong's aim for a balanced budget. "Certainly, the economy heading into the calendar year 2013 will remain at these more sluggish growth numbers, but I think there's a fair chance that in the second half of 2013 and going into 2014 there's a pick up in economic growth."
De Jong's second quarterly report points to revenue drops of $202 million from the first quarterly report and a total decline of $579 million from the forecast in last year's budget.
The report stated the major revenue drops since September's first quarterly report, which highlighted natural gas revenue declines, included a $95 million drop in property transfer taxes, which reflects the weak housing market, and a commodity revenue drop of $93 million due primarily to lower coal prices.
Opposition New Democrat Carole James said British Columbians have heard Liberal pre-election promises of balanced budgets only to find the books much deeper in the red after the election.
"It's just not credible for this finance minister to say we are going to balance," she said.
"The public has long memories, they remember what happened last time before an election when the B.C. Liberals said they were going to balance the budget. What did we get? We got the HST (harmonized sales tax)."
During the 2009 B.C. elections, the Liberals said the deficit was projected at $495 million, butshortly after they were re-elected for the third time, the government announced falling revenues due to the global economic meltdown resulted in a projected deficit of $2.8 billion.
The Liberals also announced the introduction of the HST, touching off a provincewide tax revolt that eventually saw British Columbians dump the value-added tax in a referendum vote.
De Jong blamed the continuing dropping government revenues on falling coal prices and collecting less property taxes.
He said the government has been cutting spending in an attempt to mitigate a projected $241 million drop to government revenues due to declines in the natural gas market.
De Jong said he acknowledges that some have been critical of the government's recent $15 million public information campaign to celebrate it's job-creation initiative, but he wasn't prepared to cut the program to save money.
He said the objective of the jobs plan's advertising blitz is to attract investors which is "appropriate and worth pursuing."
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