By Cheryl Jahn

Deficit will be detrimental: Bond

Aug 26, 2024 | 3:50 PM

PRINCE GEORGE – Finance Minister Katrine Conroy gave her audited financials last week, and the Province is looking at an operating deficit of five billion dollars.

“Five billion dollars is only looking at those year’s expenses, government compensation program spending on health care. It’s not looking at longer-term capital spending. So the deficit looks pretty bad. The actual state of finances are even worse, says Tegan Hill, Economic Policy Director with the Fraser Institute.

And what would make the spending more palatable if the services were what the taxpayer expected.

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“Outcomes are not improving,” says Prince George-Valemount MLA Shirley Bond. “And so from my perspective, it’s not only generational debt, but no one in British Columbia is very happy with the health care system or public safety or investment in transportation and highways. So not only do you spend at record levels, you’re simply not getting the results that are making life better for British Columbians.”

There was some mention in the audited financials of revenues from the resource sector not where they should be.

“And this government has made significant policy choices that are a detriment to the natural resources sector. We’ve seen that in the revenue. It’s dropped billions of dollars, and part of that is simply lack of permitting in terms of getting projects moving,” says Bond.

But Tegan Hill says hanging your financial hat on the resource sector is a dangerous thing.

“It’s very volatile and when you deplete a resource, you no longer have that revenue source. So actually the deficit, if this government were actually saving those resource revenues as it should be, would be even larger.”

Local governments must submit a balanced budget every year. And when it comes to capital, municipalities are overseen by what’s called the Municipal Liabilities Regulation. It sets the liability service limit at 25 per cent of specific municipal revenues. None of those rules apply to provincial spending.

“We had balanced budget legislation that required not only the government broadly to balance the budget, but individual ministers were held accountable for their own ministries. And believe me, there was a fiscal penalty if you didn’t balance the budget,” says Bond.

She says there always extenuating circumstances that override that balanced budget, such as COVID and wildfires, but the goal is always to balance the budget.