Finance Minister and Abbotsford MLA Michael de Jong

Finance Minister and Abbotsford MLA Michael de Jong

B.C. budget: Hard line continues for provincial workers

Abbotsford MLA Michael de Jong said the budget follows the promises laid-out during the election.

Government revenues have fallen $900 million short of February’s budget projections, and teachers and other government workers can expect no new money for wages, Finance Minister Mike de Jong said Thursday.

De Jong told The News that the budget follows the promises laid-out during the election.

“One of the messages I heard repeatedly during the election campaign is how important it is to the people of Abbotsford that their government demonstrate… fiscal discipline.”

Bright spots for the B.C. economy include an expected recovery in natural gas prices from historic lows, and $500 million in savings on government operations, de Jong said in a post-election budget update.

B.C. is continuing an effective freeze on public sector wage growth that began in 2010. Since the government’s “cooperative gains” mandate in 2012, nearly three quarters of union members have signed contracts with average pay increases of one to two per cent, financed through savings in other areas of operations. Most are two-year deals, with some halfway through.

The projected surplus for this year is trimmed from $197 million in February to $153 million, and de Jong had to trim contingency funds to reach that.

The Abbotsford Chamber of Commerce commended the budget for its commitment to balancing the books.

“Balanced budgets are imperative for B.C.’s economic growth and a long-standing priority for all BC Chambers and the businesses we represent,” said Mike Welte, President of the Abbotsford Chamber.

The tax hikes included are unchanged from February, including a two-year increase for personal income over $150,000 and a tobacco tax increase set for October.

The budget calls for $30 million in spending cuts this year, after last year’s reduction of $20 million in all ministries except health. The government’s “core review” of government operations is getting underway with a target of another $50 million in savings by the end of 2014, but no program targets are identified in the budget update.

The price for natural gas, the key commodity for the government’s debt reduction plan, is forecast to rise from $2.25 per gigajoule this year to $2.51 and $2.89 in the next two years. Exports of liquefied natural gas to Asia, where prices are currently far higher, can’t begin until well after 2015.

Lumber prices are forecast to decline, from a peak of US $348 per 1,000 board feet this year to $308 in 2014 and $300 in 2015.

De Jong said the government’s asset sales plan is about $8 million ahead of projections, with about half of the properties, bonds and other financial holdings sold or in negotiations to sell. The goal is to raise $475 million for next year’s budget.

Properties already sold include land on Tranquille Road in Kamloops, a school board office in Kelowna, surplus school land in Delta, vacant lots in Burnaby, Surrey and near Victoria General Hospital and former school sites in Surrey and North Vancouver.

Properties going on the market include a former school board office in Surrey, a vacant site north of Kelowna once planned for a provincial prison, former school sites in Central Saanich, Sidney and north central Vancouver Island and land for LNG development in Kitimat.

De Jong said that capital projects in Abbotsford that have been announced will move forward.

“Capital projects including Vye Road will be proceeding… this budget includes all of those capital projects… and they will proceed.”

– with files from Alex Butler