Finance Minister Kevin Falcon, like a cliché movie hero, is slowly sinking into fiscal quicksand.
In his recent quarterly fiscal report, he told British Columbians economic growth has slowed, Crown corporation revenues are down and the provincial deficit is exploding. The true culprit – runaway spending – has yet to be addressed, putting the B.C. Liberals in danger of electoral oblivion in the next election.
What was once planned to be a $925 million deficit this year has ballooned to $3.1 billion. Next year’s expected $440 million deficit will likely top $1 billion and the likelihood of returning B.C. to surplus budgets in 2013/14 is now hanging by a very thin thread.
Falcon is saying that he won’t know until this month – just weeks before the 2012/13 budget is due – if he can balance the books by 2013/14, as repeatedly promised over the past two years.
Falcon knows the stakes better than anyone. As B.C. Liberal voter support continues to bleed to the upstart B.C. Conservatives, he knows a balanced budget is the only way to go into the 2013 election with any fiscal management credibility.
The core of the cabinet also understands this. During the leadership campaign a year ago, Premier Christy Clark committed to “balancing the budget by 2013/14 or sooner,” and so did Falcon.
Health Minister Mike de Jong oversees 43 per cent of government spending.
Education Minister George Abbott, presently negotiating an expensive contract with the B.C. Teachers’ Federation (BCTF), said this about a balanced budget in 2013/14: “I believe that objective is achievable.” The rubber hits the road on contracts like the BCTF’s.
Clark sums her political philosophy up as, “Families First,” but leaving a legacy of debt for B.C.’s children and grandchildren is not family-friendly. The present generation is making a conscious decision to spend the future’s money-taking economic opportunity and prosperity from our kids and spending it on ourselves.
Four months ago, Falcon said government needs to tighten its belt. He’s right: the deficit is a spending problem, not a revenue one.
In 2001/02, the B.C. government spent $24.3 billion. This year, it’s spending $43.6 billion.
When expenses skyrocket like that, everything needs to go right economically for a government to stay on track. It hasn’t and now the B.C. Liberals have 18 months to fix things or face the electoral guillotine.
The fall legislative session has just wrapped up and the government caucus has a shiny new website highlighting their achievements.
Notable in its absence is any mention of Falcon’s directed belt-tightening. Is it even happening? The money-wasting Pacific Carbon Trust still belches millions of taxpayer dollars into private pockets, as just one of many examples of corporate welfare. Air Ambulance service is still delivered in an expensive, outdated model. Public sector executives still get massive severance packages and bloated pensions. Government cronies still get well-paid appointments to boards and panels.
The premier and cabinet already take a 10 per cent pay cut when the province is in deficit. If they don’t find a way to get spending under control, their salaries will plummet even further-many will find themselves out of work in May 2013, while others have to adjust to their new opposition member’s wage.
Jordan Bateman is the Canadian Taxpayers Federation’s B.C. director.
