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Straight talk on cuts overdue

British Columbia's economy is not getting any healthier, and that means there will be less money to run the government. That is a critical fact in this election campaign, one that will have ramifications throughout the province.

British Columbia's economy is not getting any healthier, and that means there will be less money to run the government. That is a critical fact in this election campaign, one that will have ramifications throughout the province.

It is, unfortunately, something the politicians seem unwilling to talk about.

The economic downturn is causing revenue to drop while putting pressure on the government to increase spending. Not only do more people need assistance, spending on infrastructure projects is supposed to create short-term employment.

The provincial budget unveiled in February calls for a deficit of $495 million. That was based on the theory that the economy would shrink by 0.9 per cent this year and on the belief that the government would be able to find hundreds of millions in savings. There will be more than $2 billion in savings, we are told, over the next three years.

But since the budget was introduced, the economic news has been worse. Leading economists are now predicting the economy will shrink by at least 2.5 per cent this year. That would cost the government between $240 million and $400 million in lost revenue.

To deal with a loss of that size, the government would have three choices: Increasing the deficit, raising taxes or making further cuts.

Premier Gordon Campbell has vowed that the deficit will not be more than $495 million, no matter what happens. To do that, he will need to order further slashing through government ranks.

Where will the cuts come? Campbell isn't saying, opting instead to celebrate big-ticket infrastructure projects.

The government has identified about $500 million in savings, including $200 million in grants to organizations. We won't know the details until after the election.

It should be noted, however, that these cuts are coming after eight years with a Liberal government that has boasted of the care it takes with our money. Surely any grants being given out were deemed to be essential not that long ago.

There is also a chance that these cuts could result in a transfer of the obligation to another level. That would be a false economy; the taxpayers would still be on the hook, just putting out the money in a different way.

Carole James of the New Democrats is proposing to run deficits about twice as large over the next three years, as the ones proposed by the Liberals. But she is also proposing to eliminate the carbon tax and increase spending in several areas -- including a deal to buy 30,000 acres of land between Sooke and Port Renfrew.

The New Democrats based their financial projections on the Liberal budget, so the NDP has the same fundamental problem as the Liberals. The economy is not as strong as the optimistic budget called for, which means there will be a funding gap. So will the NDP allow the deficit to rise? Or will the party opt instead to cut more services and grants? Increase taxes?

It's understandable that both party leaders would want to avoid the tough questions during a campaign. It's understandable that they would want to stress plans for new spending, as if the vaults at the legislature were overflowing with cash.

To make informed decisions at the ballot box, however, voters need to know what is being proposed -- and what is at risk.

So far, both Campbell and James would rather avoid the topic. Don't be surprised when the bad news comes after election day.