BC Budget 2013-14.

[NAB]

We are less than a month away from BC's next budget, required by law to be "balanced" under a government that constantly assures us they will meet that goal, and that it will be accomplished through a combination of sale of assets and increases in taxes (and cancellation of planned reductions in taxes - particularly for the small business community).

Given that the government appears on a path that has blown by a massive amount their last budget (2012-13), It might be interesting to discuss people's thoughts and suggestions as to what they think the upcoming budget might contain that will result in it being balanced (both as the beginning budget document and as an actual result in 2014) - or even if there is any confidence that in spite of assurances to the contrary it is even possible to produce a balanced budget for 2013-14...... .......and actually have accomplished it at the end of the year.

...What do you see as actions needed now (or at least made effective by April 1st) and driven home in their budget by the BC Liberal Government to ensure BC does not face yet another fiscal deficit situation come March 2014.

Nab

[Captain Awesome]

I don't think it will be a balanced budget . Although they'll try very hard.

[NAB]

In that it is apparently law that they do so, what are their options....? (lthough I suppose they still have time to change the law before bringing down the budget?) If they don't do that, what are the penalties if they break that law?

Nab

[John500]

Ofcourse they will balance the budget. And then a couple of months later, if re-elected, the truth comes out and they are running short again because of some unforeseen circumstances. Seems to be the case everytime. The Lieberals still think the electorate is stupid. All smoke and mirrors. And they should have a good look into the mirror themselves.

[NAB]

Let's assume for a change that they truly do intend to balance the budget, and manage the year in a way that it actually comes out at the end of the fiscal year balanced or even with a small surplus as has been touted. What are they going to have to do to accomplish that? Any realistic ideas?

Nab

[Captain Awesome]

Flaming,

Don't change my quotes. You want to make things up - do it with your own words, you're pretty good with that.

[steven lloyd]

Seems to be the case everytime. The Lieberals still think the electorate is stupid. All smoke and mirrors. And they should have a good look into the mirror themselves.

Smoke and mirrors can be highly effective – and never underestimate the power of the deceitful and misleading advertising just because it's being funded by your own tax dollars ( I wonder how they account for that in the budget? Electorate re-education? ) or multi-million tax dollar funded bollywood boondoggles to delight the more dim among us. Read some of the posts by the three Liberal stooges and other Liberal lapdogs in the Political Arena. The Liberals have good reason to think this electorate is stupid. Even for the most part otherwise seemingly intelligent posters have acknowledged their intent to vote to perpetuate the status quo and “governments we deserve”. Don't be surprised if there is no change.

[maple leaf]

I expect this budget will be done much like the 2009 budget and we will find out the truth of things after the election.As far as your question NAB. I feel sorry for the NDP, who if elected will have to come up with ways to bring in a balanced budget,and dealing with the mess these Liberals have gotten us into.It is not going to be an easy task to say the least.It is going top be very interesting to see how they deal with it.

BC’s 2009 Super-Fudge-It Budget
July 12th, 2010 · Marc Lee · 4 Comments · Provincial budget & finance


… B.C.’s public accounts for the fiscal year 2009/2010 conclusively prove that the pre-election fiscal plan foisted on British Columbians by Premier Gordon Campbell and his BC Liberals on Feb 17, 2009 was the worst — the most egregious, the most deceptive — “Fudge-it Budget” in provincial history.

The public accounts show that the Campbell Liberals inflated revenues in Victoria’s main operating account, the Consolidated Revenue Fund (CRF), by a stunning $2.558 billion — yes, Billion — with taxation receipts alone overstated by $2.1 billion.

Even under the broader GAAP (generally accepted accounting principles) presentation, the Campbell government exaggerated last year’s expected revenues by a whopping $1.3 billion.

The result: a gargantuan shortfall of $1.779 billion for fiscal 2009/10 — nearly four-times higher than Campbell’s oft-repeated, pre-election pledge of a deficit no bigger than $495 million.

Back in early 2009 before the Budget was released, we crunched some scenarios of the fiscal outlook, noting many concerns about the state of the provincial economy moving forward. We started with the rosy estimates of the Ministry of Finance, which bases its projections on the average private sector forecast coming from the MoF’s Economic Forecast Council (a long time ago, we used to be part of this autere group but got cut after the Liberals came to power in 2001).

Noting that the EFC figures were too rosy, we then modeled the impact of two recession scenarios. Preliminary GDP data for 2009 are still not available, but we used different estimates of GDP to project revenues, and in our pessimistic scenario, this resulted an estimated deficit of $1.6 billion.

So we were off a bit but not by much – and since the economics department over here is Iglika, unlike the army of number-crunchers over at the MoF, I think we did alarmingly well. In contrast, the 2009 Budget projected a deficit of only $495 million. At the time we commented:

… those deficits may be much larger before this is all over. Spending pressures for social assistance could rise much more than currently forecast. A challenge is in interpreting the government’s revenue forecasts. In years past, tax revenues have been grossly understated leading to large “surprise” surpluses at the end of the fiscal year compared to budget time. This year those revenue projections look to be more reasonable, although it will be interesting to see what the final tallies for 2008/09 will be to get a more accurate baseline (we will not know until summer). That said, given the recession, the budget projects an increase in some tax revenues predicated on growing personal income of 1.7% and growing consumer expenditures of 1.9% in 2009. This seems unlikely, and so we could easily see bigger deficits before this is all over. Added to this is the fact that there are no forecast allowances in this year’s budget, because that would make the deficits look larger (it was only OK to make surpluses look smaller).
http://www.policynote.ca/bcs-2009-super ... it-budget/

[Gone_Fishin]

* this is the kind of statement that belongs in the Political Arena, not here/Jo

[NAB]

I expect this budget will be done much like the 2009 budget and we will find out the truth of things after the election.As far as your question NAB. I feel sorry for the NDP, who if elected will have to come up with ways to bring in a balanced budget,and dealing with the mess these Liberals have gotten us into.It is not going to be an easy task to say the least.It is going top be very interesting to see how they deal with it.

Yes, that's sort of the crux of the problem isn't it? First a "budget" (usually of the fudgit type), then an election, and no one in the electorate (including the government and opposition parties themselves) really knows anywhere close to the truth of our economic situation until months after the election is over. It becomes a case of the blind leading the blind. Having our elections in the fall instead of in the spring would go a long ways toward fixing that problem.

Edit: And based on the latest utterances by the BoC, this and any future BC Government have good cause to reflect on the even stronger possibilities now that economic growth and government revenues could well be facing an even further decline lasting at least another two years.

Nab

[maple leaf]

Having our elections in the fall instead of in the spring would go a long ways toward fixing that problem.

I agree NAB ,but at this stage in the game I don't believe moving the election to the fall this time around is the right thing to do.I feel if it is to be changed ,then it should be part of a parties platform,weather Liberal or NDP.It should be voted on in an election and they should have the mandate to do so.Then if such a party wins government,then it should be changed to the fall of their third year of the term and not extended to the 4th year of the term adding on another 4-5 months to the fall.MO.And I do think it would go a long way to fixing the problem of fudgit budgets,on both sides.

[sooperphreek]

do they really truly know what is coming in and is being spent? there is so much fudgeonomics that its no wonder that it takes the auditor they hate to show the people that they are eating brownies with green flecks in them and tea that was stewed from shrooms off the hillside. my disbelief is that lying has become such a norm in this day and age they we "joe public" just accept it.

[flamingfingers]

"Taxation by stealth" - The Liberals know how to do it!

Tuesday, December 4, 2012
Basic deduction thresholds reduced

Retreat from HST = income tax windfall

Campbell River Mirror -- An unintended consequence of the HST debacle may be an income tax windfall for the cash-strapped Liberal government as it attempts to balance its 2013 budget.

In its retreat to the PST/GST the government will reduce the income tax deduction thresholds of all British Columbians on Jan. 1st. While ardently claiming to be offering its hard working citizens the most attractive income tax regime in the country, the Liberals are poised to collect more income tax next year by way of a $1,000-plus reduction of the basic and spousal pre-tax income thresholds.

The Canada Revenue Agency has recently published a document titled “Payroll Deductions Formulas for Computer Programs” which places the B.C. basic personal exemption for 2013 at $10,276, a decrease of more than $1,000 from the 2012 basic exemption of $11,354. The spousal exemption for 2013 is set at $8,860, a decrease of more than $1,000 from the 2012 exemption of $9,964.

In every other province and territory the 2013 figures are higher than the 2012 threshold. For example: Alberta’s basic deduction increases more than $300 to $17,593 and Ontario’s increases $170 to $9,574.

My accounting sources say the lower basic personal amount is a consequence of moving back from the HST to the PST effective April 1, 2013. When the HST was introduced there was an increase in the basic personal amount at the provincial level but that increase will no longer be in place when we go back to the PST.

British Columbians voted to scrap the province’s controversial harmonized sales tax in a binding, province-wide referendum in August 2011. More than 54 per cent of the 1.6 million British Columbians who cast a ballot voted to get rid of the tax. Retired Quadra Island chartered accountant and payroll formula developer Ted Conover, who has raised the issue, calls it “taxation by stealth.”

“In all my years I’ve never seen anything like this. Unlike all other jurisdictions B.C. is negatively adjusting the basic and spousal personal exemptions for 2013 thereby effectively pushing through a personal income tax increase under the radar,” Conover says.

A senior federal revenue official says: “British Columbia has traditionally utilized the indexing method for the basic personal amount. Effective January 1, 2013, however, the amounts have been legislated without indexing. The amounts as stated in the T4127 have been confirmed as correct by the government of British Columbia.”

This is coming to light as Premier Christy Clark and her Finance Minister Mike de Jong have been insisting the 2013/14 pre-election budget will be balanced despite the fact that the 2012/13 budget is headed for a newly recalculated deficit of $1.47 billion, about $500 million more than originally projected.

De Jong has said to achieve the 2013/14 balance target “we've still got $200 million to $300 million of work to do."

However, this income tax threshold change will raise more than half of that amount. My accounting sources calculate very conservatively that the reduction in the basic threshold will generate a minimum of $63 in new tax revenue per worker in B.C.’s workforce of about 2.5 million. That adds up to at least $160 million. And, that is without even factoring in spousal deductions.

One of the cornerstones of government’s current $15 million advertising campaign to sell the merits of the BC Jobs Plan is the pitch that BC has the lowest personal income taxes in the country. The Liberals claim to “have cut personal income taxes by 37 per cent or more, and removed 325,000 lower income citizens from paying any income tax at all.”

Posted by Brian Kieran
http://www.briankieran.com/2012/12/basi ... mment-form

[steven lloyd]

Millions in tax payer dollars used to obstruct Court process. Billions in tax payer dollars earmarked for "contractual obligations" ('cause who wants more debt?) to selected private interests by this “free enterprise” party. Millions more in tax payer dollars spent to fight information sharing and release in the Courts by this “open government”. Millions more again in our own tax payer dollars used to mislead, deceive and lie to us through TV ads and millions more again in our own tax payer dollars used to host a bollywood boondoggle party. Some might think the thing to do is vote for the perpetuation of the status quo and the continual re-election of governments we deserve, but if there is no change then there is no change.

[NAB]

"VICTORIA — The B.C. government has hired an economist to look over its pre-election budget, giving what the finance minister says is added assurance to its economic forecasts.

Former Bank of Montreal chief economist Tim O’Neill will review the work done by Finance Ministry staff as the 2013 budget is finalized.

O’Neill will present his assessment of the government’s economic and revenue forecasts to Finance Minister Mike de Jong before the budget is released Feb. 19.

De Jong says O’Neill’s analytical skills and outstanding reputation will help uphold the government’s commitment to fiscal transparency.

It’s unclear how much O’Neill contract will cost, and B.C.’s auditor general does a review of the provincial budget after it’s been delivered.:

http://www.theprovince.com/news/hires+e ... story.html