VICTORIA ­­– The B.C. Liberal government on Tuesday charted its return to balanced budgets, tabling a document that promised to privatize its two liquor distribution warehouses, increase MSP premiums and some business taxes, and impose a strict three-year spending freeze across most areas of government.

“We made a commitment to the people of British Columbia to return to balanced budgets by 2013-14,” Finance Minister Kevin Falcon told the legislature as he tabled B.C.’s latest budget.

“We will honour that commitment.”

Falcon said government will run a $968-million deficit for the coming 2012-13 fiscal year, but plans to return to balance by 2013-14 — the year it is legally obligated to do so.

To do this, Falcon said his government will cancel this April’s planned drop in the small business corporate income tax rate, holding it at 2.5 per cent instead of cutting it to zero.

Falcon said he also plans to raise about $700 million by selling some of the more than 100 government properties and assets identified as surplus, including its two liquor distribution warehouses.

If the fiscal situation worsens, Falcon added, the government will increase the general corporate income tax rate on April 1, 2014 to 11 per cent from 10 per cent.

The move to increase taxes is a significant departure for the B.C. Liberals, who have spent much of their decade in office seeking to lower the amount businesses have to pay.

“We do this with some reluctance,” Falcon conceded Tuesday.

“I think it underscores how serious we are about making sure we meet our target and our requirement to balance the budget in 2013-14.”

But Falcon’s path to balance was not just limited to new revenues.

In Tuesday’s budget — his first as minister of finance — Falcon also delivered an austere spending plan that places a hard three-year cap on many government ministries.

“It exacts a discipline on government that is, I think, proportional to the kind of international economic environment we find ourselves in,” said Falcon.

He said he has allowed some spending increases in areas such as health, education, justice and social development, but limited the growth in overall spending to about two per cent per year.

He took an especially hard line on the justice system, where he allowed an extra $237 million over three years, but set aside no money specifically for recommendations from a review being done into the system.

“I think it’s time we have to say the system needs to change and I respect the fact that there is judicial independence, but the judges cannot hide behind that shield and say we have no requirement to try to do things better,” Falcon said.

The Liberals also intend to extract $497 million from the Insurance Corp. of B.C.’s capital reserves over the next three years, dedicating the money to general program spending.

The government made a similar move in 2010, announcing at that time a plan to take $778 million over three years between 2010 and 2012. The capital reserves come from the optional side of ICBC’s business.