Just when Christy Clark's Liberals were enjoying a small upward tick in the polls, another political landmine has exploded. Finance Minister Mike de Jong is admitting the government's plan to balance the budget next year is in real jeopardy.
De Jong blames a sudden drop in natural-gas royalties, and those are indeed down. But the uncomfortable truth is, most of the other revenue sources also look shaky. Personal income-tax revenues, federal transfers and electricity sales are all below target this year.
That doesn't suggest an isolated slump in one sector. It points to a general weakness across the economy and it raises a basic question of strategy.
For the past three years, the Liberal game plan has been clear. Pay off the deficits that sprang from the 2008 recession and balance the budget before next year's election, come hell or high water.
There has already been one crippling blow to this timetable, when the government was forced to abandon the harmonized sales tax scheme. The price tag for that decision was $1.6 billion.
Now, with natural gas revenues down a further $1.1 billion, a balanced budget will be still more difficult to deliver on schedule. More important perhaps, in political terms, is it even worth trying?
De Jong believes it is. He has instructed the finance ministry to ransack departmental budgets, claw back every discretionary dollar and find the necessary savings.
That means additional spending cuts of $241 million this year and $872 million over the following two years. If those reductions are made, and nothing else goes wrong, the government will limp across the finish line next spring with a razor-thin surplus of $30 million.
It's a measure of how much trouble the government is in that this scenario, bad as it is, may be the best option.
Voters remember the NDP's chaotic approach to financial management when they last held office.
If the Liberals abandon their promise to balance the budget, that critical edge is lost. And then what do they campaign on?
But look at the downside. Embarking on another round of spending cuts this late in the day will be bloody.
De Jong intends to find some of the savings by "reviewing" the collective-bargaining mandate. With the government already insisting on no new money, good luck with that.
Worse still, even if the cuts can be made, will it help to unveil such a minuscule surplus just before an election?
The budget comes down in March: The election is due in May.
The whole thing may look like pulling a rabbit out of a hat.
Meanwhile, NDP leader Adrian Dix must be rubbing his hands. The Liberals are doing his work for him.
Instead of inheriting a sea of red ink, there will be clear sailing if his party is elected next year. The divisive bargaining sessions will be over, the hard choices all made.
With any kind of spurt in the economy, there should be balanced budgets and money to spend for several years to come.
Conceivably, de Jong could have taken a different route. He might have argued that now is not the moment for another round of restraint.
Indeed, a case could be made that what we really need are some targeted tax cuts to get things moving again. Throwing working-class families a lifeline might do more for the economy than bashing teachers and nurses.
And if we're talking about what's right and fair, how about a rollback on those super-sized MLA pensions?
But the government's decision is made. Next May, the premier and her colleagues will brandish their surplus and ask to be re-elected. It remains to be seen how voters will respond.
