VANCOUVER (NEWS1130) – The province is bringing in a freeze on government hiring and certain wages as it tries to cut spending in the face of big natural gas revenue losses.

Mike de Jong, the newly-installed finance minister, says projected natural gas revenues are down by more than $1 billion over three years, pushing the projected 2012-2013 deficit up $173 million to $1.14 billion.

Starting immediately, the government will trim travel expenses and other spending, freeze salaries for public sector management, institute a hiring freeze in the public service for government, and even review the government’s bargaining mandate.

De Jong says he must now find $389 million to balance next year’s budget, just ahead of the May 2013 provincial election, and he is not keen to raise taxes or cut frontline services.

“Government’s a big operation,” he says.  “Sharpening the pencils and finding ways to create those efficiencies is going to engage much of my attention going forward.”

“We are anxious to avoid impacting the programs that British Columbians rely upon,” he adds.

When asked why forecasters may not have been able to anticipate the drop in natural gas prices, de Jong says the same could be said for those who couldn’t forecast prices to rise as high as they did around 2005-2006.  “Anyone watching commodity prices will not be surprised by what has been disclosed today,” he contends.

De Jong adds he doesn’t expect the legislature to sit in the fall, but NDP House Leader John Horgan says there is plenty to debate.

“There are 85 members of the legislature from all political stripes, some independents, and we were elected to bring the views of the public to government, not to have government say, ‘Well, we don’t want to hear from you,’” says Horgan.

NDP warned the Liberals

NDP finance critic Bruce Ralston says he warned the Liberals months ago that their gas revenue projections were way too high.

“That was, I think, a reckless decision on their part, to put that in the budget and depend on that to fund the spending plans that they had. One of the ways you can do better is to budget in a less reckless and more careful way.”

He believes raising the general corporate tax rate would help recover some of the millions of dollars the province is looking for.

“Former finance minister Kevin Falcon was prepared to raise the general corporate tax rate to 11 per cent, that is increase from the current ten per cent. This finance minster doesn’t seem to have that on the table.”

BCGEU wants to bargain

Meantime the BCGEU is frustrated and is demanding the government return to the bargaining table now.

“After three and a half years without a pay raise, everyone gets a little frustrated and angry.”

But would president Darryl Walker consider taking a pay raise off of the table because of the fiscal situation?

“If we are going to be having some kind of a freeze, that means our members once again are going to be doing more with less…so what we need to do is get back to the table and find out what the mandate is. Beyond that I couldn’t possibly comment today about what we are willing to do or where we are willing to go.”

He says there has to be some more give and take.

ICBC’s union argues they still need a wage hike

David Black with COPE 378, the union representing ICBC workers who are in the midst of contract negotiations, isn’t surprised the Liberal government, as he says, has mismanaged the province’s money.
    
He says it doesn’t change anything for their members at ICBC who have been without a contract for over two years.  “This is a choice the government has chosen to get themselves into.  It’s not the responsibility, I don’t think, of ICBC workers or other public sector workers to get them out of the problem they’ve created for themselves.”
    
He says the government should make big banks pay capital taxes and look for revenue in other places.
    
“I think it would be a very popular amongst British Columbians to open liquor stores on Sunday. It would bring more money into the government but I guess for ideological reasons they’ve decided they’re going to forgo that revenue.”
    
Next Tuesday 1,500 unionized workers at various ICBC locations will strike.