VICTORIA, British Columbia — British Columbia, which is benefiting from high commodity prices and low unemployment, unveiled a C$33.9 billion provincial budget Tuesday that focused more on spending increases than tax cuts and projected a small surplus.
The budget for the 2006-07 fiscal year, which begins at the end of March, projects total revenue of C$35.4 billion, which would leave a surplus of C$600 million after C$850 million is set aside as a forecasting contingency.
Officials also revised the projected surplus for 2005-06 to C$1.45 billion, up from the C$1.3 billion they expected in a September budget update.
Finance Minister Carole Taylor acknowledged the plan was short on the dramatics that have marked past budgets.
"If you manage well, things should settle down," said Taylor.
The province plans to spend an additional C$421 million over four years on social services for children, an area that Premier Gordon Campbell's government has been accused of neglecting, and C$400 million in training to address worker shortages that threaten to slow the economy.
Taylor denied deliberately underestimating revenue for this budget, saying it was "prudent" to remain cautious about volatile energy markets and a potential slowing of the U.S. economy. It also set aside up to C$6 billion for ongoing public sector wage negotiations.
High natural gas prices poured unexpected money into the province's coffers last year, but royalty revenue is expected to rise only slightly over this fiscal year. Forestry revenue is projected to drop as the timber industry grapples with reduced U.S. housing demand and a pine beetle infestation.
"Because of the importance of resource (revenues) I think the government is on solid ground in taking a cautious approach," said Jock Finlayson, vice-president of the Business Council of British Columbia.
The opposition New Democrats said the budget was "disappointing" and did not look enough to the future.
The budget projects total debt, including that of publicly owned corporations, will increase to C$36.5 billion from C$34.8 billion, but the debt-to-GDP ratio should drop to 20.7 percent from 20.9 percent.
Capital spending was projected at C$3.5 billion, up from C$3 billion in the last budget. The province will require a 5 percent contingency in future capital budgets to avoid the inflation woes that have hit projects such as the 2010 Winter Olympics in Vancouver .
The B.C. Federation of Labour said the plan to increase spending on worker training was inadequate because it failed to address problems in industry-run training programs.
"All we're doing now is giving money to the people who made a huge mess out of the system," president Jim Sinclair said.
Small business lobbyist complained Taylor did not cut the province's sales tax, a move that would match plans for a one percentage point cut in the federal sales tax, but Taylor said the issue could be revisited closer to the 2009 election.
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