Finance Minister Kevin Falcon's new provincial budget, which he will reveal today, remains in the twin shadows of the global economic downturn and a rejected way of coping with the loss in revenue.

Falcon has, however, provided a glimmer of hope with the tax changes he announced last week for new homes. The government is being more generous than before, which means builders and buyers will benefit.

In the end, the government will benefit as well. Falcon's work helps to take some of the remaining sting out of the harmonized sales tax, which was announced in 2009 but solidly rejected by voters in 2011. The HST will disappear from the province at midnight on March 31, 2013, and the minister's announcement helps remove some of the potential negative impacts of our return to two separate taxes.

Basically, the tax burden on new homes will be the same under the old provincial sales tax, under the new provincial sales tax and under the 33-month hiccup of the HST between the old and new PSTs.

Substantial tax rebates will apply to houses priced at $825,000 or less, up from $525,000. If you buy a house worth more than that, you will only need to pay tax on the amount above the exemption. And, for the first time, the tax breaks will apply to recreational homes outside of the capital region and Greater Vancouver.

The tax changes will help make housing more affordable, which is good. Prices here are high enough without the government pushing them even higher. They will also take away the incentive to wait for lower taxes after the HST dies, which means builders should see an immediate increase in activity.

That makes sense for the government, since house construction is one of the most important factors in a healthy economy. If builders are idle, there is less money in circulation, there are more people unemployed or underemployed, and ultimately the government is taking in less money.

Falcon's deal for new houses shows an understanding of the impact the HST has had on buyers and builders.

The impact of the HST will stay with us for years to come. The province still has to return $1.6 billion in transitional funding to the federal government, with payments to be made in instalments until 2017.

That is not exactly the way the repayments will appear in today's budget. In its accounting, the government is taking the entire hit in the current year.

As a result, this year's deficit will appear to be higher than it really is and stated deficits in the next few years will be lower.

Falcon has plenty of other things to worry about with this budget, including the continuing economic downturn and lower-than-expected revenues from corporate taxes and Crown corporations.

That means the pressure to keep costs in line will not ease. Falcon needs to walk a fine line to ensure that his efforts to be stingy do not unduly hurt our economy - and also to ensure that he is not spending money that we really don't have.

Ultimately, the government must see itself in a partnership with the people paying the bills. Falcon's move on the taxes paid on new homes is a positive sign, an indication that he gets it.

The B.C. Liberals dug a deep hole for themselves with the HST. It will take a lot of work to get themselves out - but Falcon has given us a sense that maybe they can do it.