Public accounts show HST is a cash cow

The HST as cash cow, the incredible shrinking deficit and three other interesting things from the Public Accounts, the final report on the province’s financial performance in the last fiscal year.

The HST as cash cow, the incredible shrinking deficit and three other interesting things from the Public Accounts, the final report on the province’s financial performance in the last fiscal year.

First, the Public Accounts reveal that, government claims to the contrary, the HST represents a significant tax increases targeted at individuals and families.

The HST was in effect for the final nine months of the last fiscal year, which ended March 31. It pulled in $4.2 billion, or about $467 million a month.

In the previous year, the PST take was about $392 million a month.

So the HST provides government with an extra 19 per cent – roughly $900 million more a year than the PST, or about $210 per man, woman and child in the province. (That’s slightly overstated – about $100 million of the increase is due to economic growth, based on the government’s budget assumptions.)

That’s on top of the HST impact of shifting some $2 billion in taxes off corporations and businesses and onto individuals and families.

Second, the government continues to introduce budgets – except for the 2009 election budget – with huge cushions. The budget forecast a deficit of $1.7 billion. The actual deficit, according to the public accounts, was $309 million.

As recently as February, the government was still forecasting a $1.3-billion deficit.

Tax revenues were $780 million higher than expected, in large part because the government underestimated HST revenues in the budget. Crown corporations revenues were $181 million over budget, mainly because the government took $180 million more from B.C. Hydro revenues than it expected.

And spending was reined in. Overall, spending increased $903 million, or 2.3 per cent over the previous year. But that largely reflects health spending, up 4.1 per cent. Education spending – K to 12 and postsecondary – was up about one per cent. Other spending was effectively frozen, despite the huge pressures in areas like Community Living B.C.’s support for people with developmental disabilities.

Prudence is a virtue, of course; better to err on the side of caution and all that. And some room for unexpected occurrences has to be built into a $30-billion-plus budget.

But consistently coming in under budget by huge amounts cheats MLAs and the public.

A more accurate budget forecast might have resulted in different choices by the legislature. Perhaps, had MLAs known the deficit was to be $309 million, not $1.7 billion, they would have voted to spend more on support for schools or additional surgeries.

Or they might have decided there would be room for substantial across-the-board income tax cuts, given the relatively small deficit.

Those options were removed because of the inaccurate budget presented to the legislature.

Third, the Public Accounts report that the B.C. economy grew by four per cent in 2010, third strongest among the province. That’s obviously good news and the increased economic activity played a role in the increased government revenues. But the report warns growth is expected to slow to two per cent this year.

And it noted the recovery didn’t ease the unemployment rate.

Full-time employment increased 1.1 per cent, and the number of people working full-time is still below 2007 and 2008 levels. Unemployment improved slightly, to 7.6 per cent – the highest level since 2003.

Finally, the accounts reported the province’s total debt, despite recent deficits and infrastructure spending, increased by $3.3 billion, to $45.2 billion. Taxpayer-supported debt equals 15.7 per cent of GDP, a manageable level.

The NDP did highlight a big jump in long-term commitments that will bind future governments – and taxpayers – well into the future.

The contracts, for everything from payments to private companies building hospitals to highway maintenance, increased from $53 billion to $80 billion in one year.

More than half the commitments – $45 billion – bind B.C. Hydro to buy expensive electricity from private power companies.

Footnote: The Public Accounts – available online at – also reports on MLA pay and expense claims.

The base pay for the fiscal year was $102,000. But 44 of the 85 MLAs qualified for additional payments because they were in cabinet, chaired committees or played various other roles.

The actual average pay for an MLA was a record $120,198.

Just Posted

Waneta Manor is located on Laburnum Drive in Trail. Photo: Sheri Regnier
Senior dies as Trail tenants continue wait for broken elevator to be fixed

The elevator in Waneta Manor has been out of commission since February

Area A Director Ali Grieve (right), Village of Fruitvale Mayor Steve Morissette (front), and Village of Montrose Mayor Mike Walsh (left) held a congratulatory ceremony for Beaver Valley students who are part of the Class of 2021 graduates of J. L. Crowe Secondary at Beaver Creek Park on Thursday. Photo: Jim Bailey
Beaver Valley Grads of 2021

Beaver Valley mayors, RDKB Area A director celebrate their 2021 graduates with gift ceremony

Adrian Moyls is the Selkirk College Class of 2021 valedictorian and graduate of the School of Health and Human Services. Photo: Submitted
Selkirk College valedictorian proves mettle in accomplishment

Adrian Moyls is a graduate of the School of Health and Human Services

A volunteer delivers food to families as part of a West Kootenay EcoSociety program. Photo: Submitted
Farms to Friends delivers 2,500th bag of food to families in need

The program services communities in the Nelson, Trail and Castlegar areas

Selkirk College has begun its search in earnest for a leader to replace president Angus Graeme who is set to retire from his position in May 2022. Photo: Submitted
Selkirk College seeks community input for president search

Current president Angus Graeme retires next year

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

RCMP crest. (Black Press Media files)
Fort St. John man arrested after allegedly inviting sexual touching from children

Two children reported the incident to a trusted adult right away

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed teen facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

The George Road wildfire near Lytton, B.C., has grown to 250 hectares. (BC Wildfire Service)
B.C. drone sighting halts helicopters fighting 250 hectares of wildfire

‘If a drone collides with firefighting aircraft the consequences could be deadly,’ says BC Wildfire Service

A dose of the Pfizer-BioNTech COVID-19 vaccine is pictured at a vaccination site in Vancouver Thursday, March 11, 2021. THE CANADIAN PRESS/Jonathan Hayward
NACI advice to mix vaccines gets varied reaction from AstraZeneca double-dosers

NACI recommends an mRNA vaccine for all Canadians receiving a second dose of a COVID-19 vaccine

A aerial view shows the debris going into Quesnel Lake caused by a tailings pond breach near the town of Likely, B.C., Tuesday, Aug. 5, 2014. THE CANADIAN PRESS/Jonathan Hayward
Updated tailings code after Mount Polley an improvement: B.C. mines auditor

British Columbia’s chief auditor of mines has found changes to the province’s requirements for tailings storage facilities

Most Read