The B.C. economy is on the right track for recovery, but we aren't out of the woods yet. That was the message from B.C. Finance Minister Colin Hansen at a luncheon hosted by the Sunshine Coast chambers of commerce, Friday, Jan. 22, at the Sechelt Golf and Country Club.
Hansen delivered a speech to business and local government leaders looking back at the last 10 years in the B.C. economy and looking to what lies ahead -especially the harmonized sales tax (HST), the Olympics and the 2010 budget.
Hansen said while the global economy is turning around, it will take time and tight financial belts to get the province back into the black.
"We are certainly seeing some encouraging signs that the downturn is bottoming out. What we're not going to see for a number of years is recovery in government's revenues. We will have budget challenges for the next couple of years," Hansen said in an interview before his speech. "We need to make sure we fund the important, necessary programs, the health care, the education, the social safety net - but that we also tighten our belts wherever we can to get us back into a surplus as soon as possible."
Hansen said "discretionary" spending programs that are non-essential may be "streamlined" in the upcoming budget, but he could not say which programs those were.
Hansen said a key part of B.C. coming out of the recession stronger than it went in will be implementing the HST. Hansen conceded the HST was "extremely controversial" pointing to a recent poll that found 72 per cent of B.C. residents were opposed, but argued HST will make the province more competitive for investment, especially as only three provinces are yet to adopt HST.
"I don't think there is a tax that anybody can look at that would win a popularity contest. When you wind up with polls that are done that show people don't like the HST, I think if you ask the question, 'do people like paying the income tax or paying the GST?' you get a similar large majority that would say no. That's human nature," Hansen said. "I think the HST is good public policy. It's what the economists tell us is the single biggest thing we can do as a province to stimulate the economy and create jobs."
Hansen also pointed to the Olympics as a huge advantage for the province: a chance to showcase B.C. for tourism to three billion television viewers and potential foreign investors.
When asked if the spending will actually produce long-term jobs, Hansen said he believed it would, and he is personally committed to meeting with some of the 15,000 business and government leaders that have been invited to receptions and seminars as part of the festivities.
"International business is about building relationships, so I know that for the 17 days of the Olympic Games, I'm going to be going flat-out. I've told my wife I'll be home for a change of clothes from time to time. We will be making sure we build relationships with some of these business leaders to ensure they have a very strong interest in British Columbia's future," he said.
As Hansen spoke, a group of about 40 protesters, organized by the Sunshine Coast Labour Council (SCLC), rallied just off the golf course property to demand the HST be repealed before it takes effect in July and that the province get back to bargaining with paramedics.
Stevo Knauff, SCLC president, said the HST is going to disproportionately affect those who earn less and need the money most.
"We figure that it will be an additional 25 cents per hour off every hour that you work. If you are a high-income earner, that's not going to affect you very much but if you are a low-income earner, 25 cents an hour is going to be brutal," he said. "We need to see more appropriate taxation. We need to see an increase in the corporate taxes in the province so our social services can come back to us, so our education can be funded appropriately, so health care can be properly funded."
