B.C.’s Liberal government is preparing to stake its credibility and political future on balancing the province’s books this week in a budget that the Opposition NDP is already dismissing as nothing more than smoke and mirrors.
Before Finance Minister Mike de Jong tables the budget on Tuesday, the government is expected to release the results of an independent consultant’s review into its revenue projections.
Tim O’Neill, a former Bank of Montreal chief economist, will describe his findings Monday at the legislature.
The government brought in O’Neill to boost the credibility of its pre-election budget, but critics have said his report won’t be much use because it doesn’t look at spending figures to see whether the books are truly balanced.
De Jong has said Tuesday’s budget would need a healthy surplus for voters to believe it was actually balanced, and there’s no money available for the traditional pre-election good-news announcements.
The budget is not expected to raise corporate capital, bank or sales taxes, and government officials have foreshadowed that it will focus on limiting spending to below the growth of the economy, bending the growth of health-care expenditures and selling surplus assets.
The government announced a one per cent increase to the corporate income tax rate last year, effective April 2014, which technically falls in next year’s budget, not the one set for Tuesday.
Last year, the government pegged spending growth at two per cent. A Central Credit Union report released Thursday said B.C.’s economy should grow 2.2 per cent in 2013 and 2.8 per cent in 2014.
The government had previously forecast $475 million in revenue for the coming year from the sale of “surplus” properties and buildings.
Many of those are expected to be in Greater Victoria and Vancouver, including land from school districts, health authorities, Crown corporations, transportation entities and the Provincial Capital Commission.
The asset sales can’t be tested against reality because the government won’t reveal all the properties it is divesting, said NDP critic Bruce Ralston.
The Opposition expects the budget to be similar to one tabled in 2009, when the Liberals’ $495-million pre-election deficit ballooned to $1.8 billion a year later, Ralston said.
“When you set the budget in that context, it’s difficult to believe that they are going to do anything other than a series of smoke and mirrors and sleight of hand stuff.”
