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The Liberal government, after three years of deep budget and program cuts, will head into next May's provincial election with a budget boasting a surplus nearing $1 billion and projections of larger surpluses in the coming years.
The rosy financial report was warmly received by the business community, but social groups and the Opposition New Democrats said many British Columbians were hurt by government cuts.
A first-quarter update of the province's books forecasts a surplus of $865 million for the February 2004 budget, Collins said. He originally forecast a $100-million surplus.
The financial report also forecasts growing surpluses for future budgets, said Collins.
A surplus of $905 million is forecast for the 2005/06 budget and the 2006/07 budget surplus is forecast to hit $1.8 billion.
Higher than expected revenues in the forest and energy sectors are fuelling the increased surplus forecasts as are increased corporate tax revenues due to a rebounding economy, Collins said.
"Economic growth in British Columbia continues to be robust this year, reflecting solid employment gains, near record lumber prices, higher energy and mineral prices, sustained housing market activity and stronger retail sales," said the report.
Collins said the government will turn to British Columbians to help it determine how best to use the surplus funds.
Paying down the debt, reducing taxes and increasing spending, including health and education, are all government possibilities, he said.
An all-party government committee starts public meetings this week to determine the budget priorities of British Columbians, Collins said.
"We've got opportunities," he said. "Things are up for discussion."
The surplus will not be used as a pre-election slush fund to buy votes, said Collins.
"None of it is in play for political purposes," he said. "That money isn't my money. That money belongs to British Columbians."
Darcy Rezac, Vancouver Board of Trade spokesman, said the government is wise to slowly weigh its options for the surplus funds.
"The fact that we do have a modest surplus shows it's time to pause and reflect and see where we are," he said.
The business community doesn't have a set wish list, but paying down the debt and reducing the provincial sales tax are longstanding priorities, Rezac said.
The government said it was forced to raise the sales tax to 7.5 per cent from seven per cent almost three years ago to cover a salary arbitration for doctors.
Collins said reducing the sales tax is always under discussion, but no decision on its future has been made.
The provincial debt is forecast to hit $37.2 billion this year. It was forecast earlier to increase to $39.4 billion.
A spokesman for a British Columbia organization representing family and child services said the government should use part of the surplus to repay the $285 million it cut from the social service budget this year.
"If they are small-L Liberals then they have a responsibility to make sure that the most needy in our society are provided for," said Craig Meredith, Federation of Child and Family Services of B.C. spokesman.
Collins said the surplus forecast ensures British Columbia has climbed out of its three-year slide into have-not province status where it received hundreds of million of dollars in equalization payments from Ottawa.
Under the equalization program, Ottawa gives the have-not provinces cash to deliver social programs.
British Columbia will rejoin Alberta and Ontario as Canada's only have provinces, Collins said.
"We are no longer a have-not province," said Collins, adding B.C. could still receive up to $45 million in have-not payments over the next two years.
Opposition NDP Leader Carole James said high world commodity prices and low interest rates are propping up British Columbia's bottom line and the surplus has "not a lot to do with the Liberal government."
She said she intends to make the surplus a major issue during next springs's election campaign.
"Who do people trust to spend that surplus," said James.
The government forecast economic growth of 2.9 per cent in British Columbia this year. The private sector predicted three per cent growth
Source: Dirk Meissner
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