Finance Minister Colin Hansen said Thursday that B.C. ended the fiscal year with a smaller deficit than the record deficit forecast last September thanks to drastic spending cuts.
The province shrank the September-forecasted deficit by $996 million to $1.8 billion – a decrease that was driven by an $833 million reduction in forecasted government costs.
While figures released by the government were cause for optimism when compared to the September forecast, the government continues to project annual deficits until fiscal 2013.
Government expenses rose $1.1 billion, or 2.8%, from fiscal 2008, in part due to stimulus spending and expanding healthcare and education budgets. Government revenue decreased 2% to $37.5 billion in fiscal 2009 compared with fiscal 2008 as tax and natural resource revenue fell sharply in the downturn.
Total provincial debt increased by $3.8 billion to $41.9 billion in fiscal 2009 as the province borrowed more money to fund capital projects and meet working capital requirements.
Members of cabinet will receive a 10% salary cut because the government did not balance its books.
Hansen told the media that the public should not expect any spending on new government programs in the immediate future.
He said further spending cuts would be required to return to balanced books in 2013 if it were not for the $1.6 billion the province is receiving from Ottawa related to the implementation of the HST.
Hansen projected a $1.7 billion deficit in fiscal 2010 and $945 million deficit in fiscal 2011.