The New Democrats say they will spend more to make life more affordable while delivering a balanced budget, after releasing audited public accounts that show the previous Liberal government banked a $2.74-billion surplus.
The large surplus, due in part to a hot housing market, is part of a strong 2016-2017 fiscal year that saw British Columbia outperform most other provinces.
While the surplus can’t be spent — it must go directly toward the province’s operating debt — Finance Minister Carole James used it as evidence that the previous government had an “unbalanced” approach to the economy.
“The public accounts for 2016-2017 show that B.C.’s economy is strong. We’re growing faster than was forecast and we certainly have revenues that were higher than projected,” James said.
“That’s a surplus that doesn’t reflect the reality for many British Columbians. It’s really tough for people out there to see a surplus this size, when they’re struggling day to day to manage.”
She pointed to poverty rates, seniors who can’t find care and parents who can’t afford child care as examples.
James said the NDP will release an updated, balanced budget on Sept. 11 — an interim step prompted by the change in government. A complete budget will be delivered for the next fiscal year in February.
Already, she said, the budget is facing pressure: Wildfire and flood spending is $389 million over budget, interest rates have increased and the financial stability of the Insurance Corp. of B.C. is in question.
ICBC earnings were $319 million lower in 2016-2017 than the previous year, accounts show.
The accounts also show British Columbia outperformed all but Alberta and Saskatchewan in debt-to-GDP ratio. Provincial GDP grew by 3.7 per cent, the highest rate among provinces and better than the national average of 1.3 per cent.
Overall debt increased by $591 million, including a $1.8-billion rise in self-supported debt from bodies such as B.C. Hydro and ICBC that was offset by a $1.2-billion dip in taxpayer-supported debt.
The surplus was more than 10 times higher than the $264 million estimated in the budget.
Contributing to the surplus was an increase in property transfer tax revenue of $493 million, including $102 million from the foreign buyers’ tax in Metro Vancouver. Personal income tax revenue increased by $1.3 billion, reflecting normal annual growth in the tax base and a significant adjustment to the estimate made in the prior year.
James said continued and stable economic growth is projected, but with much of the province’s growth coming from a hot housing market and existing pressures, that’s not a guarantee.
Liberal finance critic Shirley Bond said the public accounts affirmed the Liberals’ positive fiscal record and is in line with the unaudited $2.8-billion surplus that Liberal finance minister Mike de Jong announced just before the government changed hands.
“B.C.’s balanced budget today is the envy of most jurisdictions in the country,” Bond said in an interview.
The numbers also show the Liberals spent in important areas, she said. Program spending increased 4.1 per cent over the year, including increases of $486 million on health, $256 million on education and $137 million on social programs.
“The unanswered question is whether the NDP have a plan on how to keep B.C.’s economy growing to ensure investments can continue to be made. This should not be a one-time spending spree that government can never afford again. We need to see a plan to sustain revenues,” she said.
The Office of the Auditor General identified three concerns in the public accounts.
First, the surplus would be $900 million higher, if the province reported the way it receives federal funds as a lump sum, as opposed to incrementally.
Second, the government sets its own accounting policies for rate-regulating accounting at bodies such as B.C. Hydro. The overall financial impact is unknown.
Third, it found $3.4-billion debt from the Transportation Investment Corp., which is responsible for the Port Mann Bridge and Massey Tunnel replacement project, was reported in the wrong category — although that doesn’t affect the government’s bottom line.