B.C.'s crying the financial blues
Bad news from the provincial government this morning as the Liberal government announced that it's projecting a $3.1 billion deficit for 2011-12 -- or $313 million more than the estimate it offered up three months ago.
In his second-quarter report, Finance Minister Kevin Falcon is blaming a drop in revenue of $303 million, given lower corporate income tax revenues, lower natural resource revenue and lower projected income from commercial Crown corporations.
In September, he warned that the defeat of the HST would hit the province's books hard.
But this is different. It says that the outlook for the province is getting worse and worse. It says that prices for the natural resources, which BC rode hard as the rest of the country wobbled during the recession, aren't going to hold things together forever. But it might put added pressure on Premier Christy Clark to get out and make the most of all the mining opportunities she has promised to deliver, despite the controversy they're creating.
And it isn't the only warning sign that people living in BC might want to salt an extra layer of cash under their mattresses, just in case.
The Canadian economy is about to take a beating too.
According to the Organization for Economic Co-operation and Development, Europe's debt problems and the global slowdown have already significantly weakened Canada's economy -- and pose even graver risks going forward, warns a leading international economic organization.
In a global forecast released Monday, the forum said Canada is currently going through a rough patch of weak growth mainly because of the deteriorating "external environment" -- code for what is widely viewed as a looming European meltdown and a likely failure by the U.S. to get its fiscal act together.
But it isn't entirely the outside world that threatens Canada's financial outlook, the report says. Canadians have taken on way too much personal debt, and they know it. And consumer confidence -- code for "willingness to part with any of their paycheque" -- is falling as a result, it says.
All in all, not much good news as the year draws to a close.