VICTORIA, B.C. - B.C. can now spend in the red without breaking the Liberal government's once-touted balanced-budget law.

The provincial legislature passed amendments to the law Thursday night that will allow Finance Minister Colin Hansen to bring in a deficit when he tables his provincial budget next Tuesday.

Opposition New Democratic Party Leader Carole James said her members will vote in favour of Bill 48, the Finance Statutes (Deficit Authorization and Debt Elimination) Amendment Act.

But that hasn't stopped the Opposition from raising questions about the government's budget intentions, especially after the Liberals spent much of the winter and fall saying British Columbia would post a surplus despite a worldwide economic meltdown.

Premier Gordon Campbell and Hansen said they are committed to keeping British Columbia from deficit spending, but in late January conceded they had lost the battle and the province was about to slip into the red financially.

"It's evident from many of the comments of government ministers over the last six months that they failed or were unwilling to accept changes in economic reality that many commentators - indeed most commentators - noted and recommended a change of course to government," said NDP finance critic Bruce Ralston during debate in the legislature.

Hansen said the amended budget law calls for two consecutive deficits, followed by a surplus budget.

"Despite a very rigorous budget process that achieves significant administrative savings across ministries, government finds it necessary, temporarily, to run deficits for the next two years in order to protect health care, education and social services that British Columbia families depend on," said Hansen.

Cabinet ministers face salary hold backs of at least 10 per cent during the two-year deficit period, he said - a consequence of the original balanced-budget legislation.

Hansen said the size of the deficit will be revealed when he tables the budget next week.

Bill 48 also includes an amendment to reduce provincial debt.

Beginning the first year the budget is again balanced, the finance minister must use any year-over-year increase in cash in a consolidated revenue fund to reduce or eliminate provincial government direct operating debt.

British Columbia's is not the only government that will post deficits as the country grapples with a worldwide recession.

The federal government expects deficits totalling $86 billion over the next five years as it attempts to stimulate the economy.

Ontario, Quebec, Nova Scotia, New Brunswick, and Newfoundland and Labrador have all signalled they will have to spend beyond their means to rein in the recession and protect health care, schools and other services.

Only Saskatchewan, Alberta and Manitoba have indicated they will deliver balanced budgets in the coming year.