$3B shortfall challenges B.C. finance minister

As government revenues plunge, B.C. taxpayers should brace themselves for a "very, very difficult" budget in two weeks, Finance Minister Colin Hansen is warning.

The government is desperately trying to maintain key services, but a $3-billion shortfall is making that a real challenge, Hansensaid.

"We are desperately trying to maintain the critical services in health care and education and the social services. So it's definitely been a challenging summer," the finance minister said Wednesday.

In the last three months,British Columbiahas faced a financialwhipsaw, he said, including:

• Corporate income tax and personal income tax revenuedown by about $1 billion.
• Projected revenue from natural gas down by about $500 million.
• Projected revenue from other natural resources down by about $500 million.
• Projected revenue from the social services tax down by about $200 million.
• Spending on forest fires and social services up by about $500 million.

Hansen didn'tsay how he plans to address the shortfall in two weeks when he introduces thefirst provincial budget since the government was re-elected in May, but it could translate into a larger deficit, higher taxes or more program cuts.

Last month, the minister said his government would not be able to meet its target of a$500-million deficit, as the B.C. Liberals promised during the spring election campaign.

In the Februarybudget before the election,Hansen forecast B.C.'s totalspending for the fiscal yearwould be about $39 billion.