No tax increase to pay back HST: Finance Minister

VICTORIA (NEWS1130) – Finance Minister Kevin Falcon says people should not expect the his Liberal government to raises taxes in order to pay down BC’s hefty deficit and pay back HST transition funding owed to Ottawa.

This morning, the province announced it had reached a deal to repay the federal government $1.6 billion in HST funding over five years and without interest, saving the province $118 million. This after voters rejected the tax in a referendum last year.    

Falcon says this year’s deficit is projected at $3 billion but the government still plans to be back in the black by 2013-2014. That raises the specter of tax hikes, service cuts or a combination of the two, but Falcon isn’t keen on one of those options.
    
“No, I don’t think you should have expectation[s] of tax increases from a government that has spent ten years in power reducing taxes,” he says.

“Wait till February.  I’m not announcing the budget here,” Falcon said when pressed about which options he’s considering.

Falcon says not raising taxes does not automatically mean service and program cuts.

“It just means that you don’t take anything off the table when you’re putting together a budget.  You make sure everything’s on the table, you talk to as many people as you can, you engage the public, you try and listen to what the public’s telling you, and then you make the difficult decisions necessary,” he says.
    
Falcon insists the HST repayment deal with Ottawa is the best BC could get and the agreement was only finalized Tuesday night.

“In a perfect world I wish we didn’t have to pay back anything, but the referendum decision was clear and the direction was clear to the government of BC and we’re obviously following that direction,” Falcon says.
    
Meanwhile, NDP finance critic Bruce Ralston wants the feds to speed up the transition back to the PST-GST.

“It was a bad deal but the terms were very clear.  So I don’t there was much of an option other than to pay it back,” he says.