The BC budget needs to be careful; debt increases by $ 100 per second
BC’s latest budget looks like something from the distant, pre-pandemic past.
The province’s throne speech now gives a little snapshot of the future budget. And if we want to get back to balanced budgets, we will have to go faster than Marty McFly to sort out our finances going forward.
In the heyday of February 2020, the government of British Columbia had a balanced operating budget.
Debt was still growing at an alarming rate due to the ICBC and a lot of capital spending, but let’s not walk away as we happily recall The Before Times.
The operating budget was balanced in British Columbia
Then it happened.
The COVID-19 pandemic threw a wrench in the works, and now we’re looking at a $ 13 billion provincial budget deficit. That’s the cost of six new St. Paul’s hospitals.
Our provincial debt is over $ 75 billion and increasing by $ 100 per second.
Hopefully now that we see the light at the end of this COVID tunnel from hell, we need to stick to funding our basic needs and resist the temptation to pretend budgets don’t matter and that carefree spending is, like, super dope.
Prime Minister Justin Trudeau is setting a terrible example for the provinces, and we can’t afford to sit at his cool kids’ table right now spending like there’s no tomorrow.
The British Columbia Speech from the Throne has a few areas of concern, and we should use them as a warning.
Lt.-Gov. Janet Austin read that Premier John Horgan wants a âmade-in-British Columbia shipbuilding strategyâ.
These words remind me of the Fast Cat Ferry fiasco that happened the last time the NDP ran a majority government. The project budget has doubled in size. To make matters worse, the ships were unusable as they did not fit the narrow channels between the islands in the Gulf, creating massive wakes that damaged the shore. The breach cost BC Ferries and taxpayers $ 446 million, as three of the ships were last seen in Egypt. The current NDP government must learn from these past mistakes and not repeat them.
Another yellow light on the dashboard was the mention in the Speech from the Throne of something called âIn BC Investment Corporationâ. It is a fund described as something that “will help promising BC businesses grow, anchor talent – keeping jobs and investments at home in BC”.
There is no taxpayer price tag on this InBC Investment Corp., but these designs can get expensive quickly. While it might seem nice to help, these types of funds risk being plagued by the welfare of corporations, where bureaucrats and politicians pick favorites and taxpayers’ money is wasted on businesses that don’t. shouldn’t have relied on taxpayer dollars in the first place.
There was a promising promise in the Speech from the Throne. Austin said, “Then after the pandemic is over, it will carefully return to balanced budgets as the economy recovers.”
It’s a good sign of good intentions, but taxpayers would feel more comfortable if we had a ring and a date.
The Nova Scotia government has said it will balance its budget within four years.
We should match that east coast target here on the west coast.
Finally, we can no longer afford tax hikes.
In the last budget, we saw the brand new tax on sugary drinks and the tax on online streaming created as the carbon tax was about to go up. These new taxes are expected to bring in over $ 30 million and $ 16 million respectively, as our carbon tax just increased this month, now the highest in Canada.
British Columbians are exhausted and we cannot afford more tax hikes.
Speeches from the Throne are like auto ads, while budgets look like the real car. The throne speech announcement will show you shiny cup holders and vroom vroom around mountain roads, but the actual car is what matters. This budget will give us a glimpse under the hood of DeLorean, and it needs some spending restraint to ensure the province’s finances return smoothly in the future.
Kris Sims is the British Columbia Director of the Canadian Taxpayers Federation.
Kris is one of our thought leaders. For interview requests, click here.
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