* C$40.6 billion operating budget
* Province expects to outpace Canada in economic growth
* Awaits final Olympic cost tally
By Allan Dowd
VICTORIA, British Columbia, March 2 British
Columbia unveiled a 2010-11 budget that includes a C$1.7
billion ($1.64 billion) deficit on Tuesday, and said it is
keeping a close eye on whether it will have to cover any
unexpected costs from the Vancouver Winter Olympics.
The Liberal provincial government said the budget for the
fiscal year that begins in April 1 will be C$40.6 billion, and
that it is confident that the 2009-10 budget, which had to be
revised midway through the year, will end up with the C$2.8
billion deficit it forecast earlier.
The government said it expects a return to budget surpluses
in three years.
British Columbia had agreed to spend C$765 million to help
host the Olympics, which ended on Sunday, including setting
aside C$79 million for any unexpected costs.
Finance Minister Colin Hansen acknowledged there are
"pressures" on that fund. "We are not expecting them to be so
great that it will be considerably above that," he said.
Games organizers had a largely privately funded C$1.7
billion operating budget, but the event was hit with weather
problems that forced snow to be trucked to one venue and the
cancellation of thousands of tickets.
Merchandise sales, however, were higher than expected
during the Games, which received wide international acclaim
after a rough start.
Organizers are still finalizing some contracts, including
one to compensate the Whistler ski resort for any business it
lost by holding alpine and sliding competitions there, so the
full cost of the Games may not be known until early summer.
The province paid half of the C$585 million cost of
building venues for the Games and a portion of the C$900
million security bill.
The new provincial budget projects revenues to increase to
C$39.2 billion from C$37 billion in the revised 2009-10 budget.
The C$40.6 billion in planned spending in 2010-11 is an
increase from C$39.7 billion the year before.
Spending on health care will increase slightly, but cuts to
ministries such as forestry will require job cuts, provincial
Total capital spending is expected to be C$8.1 billion, up
from C$7.3 billion in the 2009-10 budget, due largely to
economic stimulus projects with the federal government.
The province's total debt will climb to C$47.8 billion,
giving it a debt to GDP ratio of 24.3 percent, up from C$41.3
billion and 22 percent in the last budget.
Provincial economists project British Columbia will have
2.2 percent real GDP growth in 2010, lower than the 2.9 percent
to 3 percent that private economists have projected, but above
the 2 percent growth the province expects for Canada
"Although it will take time, we are on the road to
recovery," Hansen told the provincial legislature.
The province's GDP dropped 2.7 percent in 2009, dragged
down by falling commodity prices and the collapse of the U.S.
housing market, which hit British Columbia's forest industry.
The Vancouver Olympics, while having provided a
psychological boost with Canada's strong medal count, is
expected provide only a .01 percent boost to economic growth,
The head of the B.C. Federation of Labor, Jim Sinclair,
complained that cutting provincial jobs at a time when the
economy was already struggling was "like throwing gasoline on
(Reporting Allan Dowd, editing by Peter Galloway)