BC Finance Minister Kevin Falcon brought in an austere budget on February 21, which clamped down on spending in an effort to reduce debt and balance the books by next year.
Budget 2012 forecasts a deficit of $968 million during the next fiscal year, which would bring total debt to $57.6 billion. The government plans to return to a balanced budget by 2013 and imposed a strict three-year spending freeze across most areas of government, including on the service fee to BC Ferries.
Some provisions of the budget include a plan to privatize two liquor distribution warehouses, increase MSP premiums by four per cent, cancel this April’s planned decrease in the small business corporate income tax rate and selling off some government properties and assets.
The budget also includes a $10,000 tax credit for first-time homebuyers who buy a new house, a $1,000 tax credit for seniors for home renovations, and a $50 per child credit for fitness and arts activities.
City of Powell River Mayor Dave Formosa and Kevin Sigouin, a Powell River resident who is secretary of the BC Liberal Party, sat directly behind Falcon in the legislature as he delivered the budget.
Formosa said it was an honour to be invited to Victoria for the budget presentation and to sit in the legislature. “Given the economic times we have, I support the budget,” he said. “Nobody likes to see these kinds of firm budgets, but nobody likes to see stuff like they have in Italy and Greece either. I think they’re doing the right thing. They’re being prudent.”
Formosa also said he didn’t expect an increase to the ferry subsidy, but council plans on working with BC Ferries to present a case to the government for replacing the aging ferries serving the community.
Colin Palmer, Powell River Regional District chair and chair of a group of 12 regional districts and the Islands Trust chairs, who have organized to make recommendations on matters relating to BC Ferries, said the lack of an increase to the service fee is “really, really serious. I don’t want to sound like a doomsday artist, but that is a very dramatic factor.”
Palmer pointed to the report by BC Ferry Commissioner Gord Macatee that included 24 recommendations. “One of the major ones was the government should be putting more money into the ferry system.”
Ferry fares are going up 4.15 per cent on April 1, Palmer said, and are slated to rise 8.25 per cent the year after that and another 8.25 per cent the following year. “Batten down the hatches and let’s see what the regional district chairs, the ferry advisory committees and the ferry corporation can do with Kevin Falcon and his complete disregard for Vancouver Island, the coast and northern ferries. I’m kind of bitter about it, particularly after the commissioner gave the whole issue credibility.”
Powell River-Sunshine Coast MLA Nicholas Simons said the budget was a disappointment to coastal and ferry-dependent communities. “The ferry commissioner said ferry fares were at a tipping point and that the government needed to increase service fees, but they don’t seem to take it seriously enough. Unfortunately there’s very little in this budget to be happy about.”
Simons said he had a meeting with Minister of Transportation and Infrastructure Blair Lekstrom who told him it was too early to act on the commissioner’s recommendations in this budget. “But for many people it’s practically too late. I will be asking the minister to maintain the freeze on fares while government figures out its response to the commissioner’s recommendations.”
Jack Barr, president of Powell River Chamber of Commerce, said it was good to see that the government was working toward a balanced budget and deficit and debt reduction. While he appreciated the need for stimulus packages during the economic difficulties of the past few years, the economy seems to be turning around. “It is time to get our ship back on track,” Barr said. “It seems to be a relatively fiscally prudent budget at this point in time.”
