British Columbia is often defined by what divides us: geography, politics, social interests, environmental issues.
Something else that divides us? Our bank balances or the size of our payday loans.
B.C. is home to the uber-wealthy, the mere wealthy runner-ups, the keeping our heads above water crowd and the four in 10 British Columbians who are $200 away from not being able to pay their bills, that last one according to the latest MNP Consumer Debt Index report.
Tough crowds to please. Throw last month’s provincial budget into the mix and it’s sure to spark some reaction from all quarters.
Pity the poor scribes who have to make sense of it all in a matter of hours during the budget lock-up, ready to tweet as the Finance minister rises in the legislature.
Then the days go by and the impact of various budgetary measures begin to sink in.
Finance minister Carole James didn’t have an envious task before her. The smoke and mirrors of past so-called balanced budgets had to come home to roost one day. They started, last month.
In last years budget, former finance minister Mike de Jong pegged the loss at the Insurance Corporation of B.C. at $144 million for 2017/18. James updated it to $1.3 billion.
What de Jong saw as $312 million in cumulative losses at ICBC by 2019/20, now stand at $2 billion.
ICBC isn’t the only fiscal basket case the province will need to deal with.
Cue B.C. Hydro, even though the government is still counting on a $712 million annual ‘dividend’ from the utility over the next three years, while still adding $2.4 billion to Hydro’s debt load.
The B.C. Lottery corporation is expected to hand over $1.3 billion in winnings to the province. The last time a NDP government wrote a provincial budget in 2000/01 that figure was $562 million.
Even then a sum seen as too high by the B.C. Liberal party, who campaigned on “stopping the expansion of gambling that has increased gambling addiction and put new strains on families.”
In former premier Gordon Campbell first budget, Crown corporations accounted for $1 billion of provincial revenue. This year, they’re looking for $2.6 billion, and that’s after accounting for a $684 million loss at ICBC.
One challenge with covering a budget is that it’s more about where a government is going than where it was.
Campbell inherited a provincial debt of $33.6 billion when he assumed office in 2001. Former premier Christy Clark took the keys to the provincial treasury with a debt load of $45.1 billion, a difference of $11.5 billion.
Clark handed over a debt of $65.3 billion to Premier John Horgan, a difference of $20.1 billion from when Clark assumed power in 2011.
In budget 2017/18, de Jong forecast a provincial debt of $77.7 billion by 2019/20. James forecasts the debt will hit $77 billion by 2020/21.
Not unexpectedly, the Independent Contractors and Businesses Association of B.C. (ICBA) wasn’t happy about it, noting: “the provincial debt will grow by a billion dollars each quarter over the next two years”
Which ministries and agencies are the culprits?
B.C. Transit accounts for $77 million of new debt over 2017/18, education ($395 million), health ($500 million), social housing ($723 million) and both the B.C. Transportation Financing Authority and B.C. Hydro at $4.7 billion each.
It’s a bit much for the ICBA to shake the boogeyman debt doll at the government, when the bulk of the new debt is the result of their own wish list: Site C and a new Patullo bridge.
Site C ‘pink slip’ campaign one day, debt fear-mongering the next. Puhleeze.
The government’s contractual obligations – office leases, cleaning contracts, hydro deals – is a relatively new feature in provincial financial reporting. In 2008/09, the government’s obligations stood at $52 billion.
By the time Campbell turned the keys over to Clark they had reached $80.2 billion, more than half – $45.2 billion – for B.C. Hydro’s independent power producer agreements.
Horgan inherited $95.8 billion in obligations to keep or break, $54.7 billion of it in Hydro deals.
Against this backdrop of fiscal basket cases among Crown corporations, debt and contractual obligations, James handled some budgetary tasks well, others not so well.
It’s those not so well items that are a story for another day.Dermod Travis