British Columbia’s last budget feels like something from a distant, pre-pandemic past.
Now the province’s throne speech gives a little glance into the future budget. And if we’re going to get back to balanced budgets, we’re going to have to go faster than Marty McFly to fix our finances in the future.
Back in the halcyon days of February 2020, the B.C. government had a balanced operating budget.
The debt was still going up at an alarming rate due to ICBC and lots of capital spending, but let’s not digress while we happily reminisce about the Before Times.
The operating budget was balanced in B.C.
Then it happened.
The COVID-19 pandemic threw a spanner into the works, and now we are staring at a provincial budget deficit of $13 billion. That’s the cost of six new St. Paul’s hospitals.
Our provincial debt is more than $75 billion, and it’s increasing by $100 per second.
Hopefully, now that we are seeing the light at the end of this COVID Tunnel of Hell, we need to stick to funding our basic needs and resist the temptation to pretend that budgets don’t matter and that heedless spending is, like, super dope.
Prime Minister Justin Trudeau is setting a terrible example for the provinces, and we can’t afford to sit at his cool kids’ table right now by spending like there’s no tomorrow.
The B.C. throne speech has a few causes of concern, and we should use them as a warning.
Lt.-Gov. Janet Austin read that Premier John Horgan wants a “made-in-B.C. shipbuilding strategy.”
Those words bring to mind the Fast Cat Ferry fiasco that happened the last time the NDP held a majority government. The project budget doubled in size. To make matters worse, the ships were unusable because they did not suit the narrow channels between the gulf islands, creating massive wakes that were damaging the shoreline. That bungle cost B.C. Ferries and taxpayers $446 million, with three of the ships were last seen mothballed in Egypt. This current NDP government must learn from those mistakes of the past and not repeat them.
Another yellow warning light on the dashboard was the throne speech mention of something called the “In BC Investment Corporation.” It’s a fund described as something that will “help promising B.C. companies scale up, anchor talent – keeping jobs and investment at home in British Columbia.”
There is no taxpayer price tag on this InBC Investment Corp., but these creations can get expensive fast. While it sounds nice to help out, these sorts of funds risk getting plagued by corporate welfare, where bureaucrats and politicians pick favourites and taxpayers’ money is wasted on business ventures that shouldn’t have relied on taxpayers’ money in the first place.
There was a promising promise in the throne speech. Austin said “Then, after the pandemic ends, it will carefully return to balanced budgets as the economy recovers.”
That’s a good sign of good intentions, but taxpayers would feel more at ease if we had a ring and a date.
The government of Nova Scotia has said it will bring its budget back into balance within four years.
We should match that East Coast goal here on the West Coast.
Lastly, we cannot afford any more tax hikes.
In the last budget, we saw the brand new sweetened drinks tax and the online streaming tax created while the carbon tax was set to go up again. Those new taxes are set to pull in more than $30 million and $16 million respectively, while our carbon tax was just hiked this month, keeping it the highest in Canada.
British Columbians are tapped out and we can’t afford new tax hikes.
Throne speeches are like car commercials while budgets are akin to the actual car. The throne speech advertisement will show you shiny cup holders and vroom vroom around mountain roads, but the actual car is what matters. This budget will give us a look under the DeLorean’s hood, and it needs some spending restraint to make sure the province’s finances run smoothly back into the future.
Kris Sims is the B.C. Director of the Canadian Taxpayers Federation.
Kris is one of our Thought Leaders. For interview requests, click here.
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