Five months ago, I predicted that the Liberal government of British Columbia would fail in its effort to balance the 2013 budget. Notwithstanding this week’s boastful headlines to the contrary, the jury is still out.
I will not assert, as many others have done, that the surplus is purely fictional, but rather that, for the time being, we just don’t know. So many variables are at play, and the projected surplus is so razor-thin — $197 million in a $44 billion operational budget — that we will have to wait until well after the May election before we can be sure whether or not the government was massaging the numbers. (This in itself is good reason to take seriously the proposal by three independent MLAs to change BC’s fixed election date from the spring to the fall starting in 2017.)
But such uncertainty over the ontological status of the surplus does not mean that I am at a loss for words. Yesterday’s budget contains many features both good and bad (okay, mostly bad), so let’s take a look-see.
First of all, there is the accounting trickery. About $150 million dollars in program spending that would normally find itself in this year’s budget has instead been moved to last year’s. That’s most of the surplus right there. While malfeasance of this kind might not warrant such grown-up terminology as “fraudulent” (or perhaps even “malfeasance”), I think “fishy” is more than appropriate. Furthermore, the wiggle room offered for the forecast allowance and contingencies is considerably lower than what some would call prudent, and revenue from natural resources is alleged to be exaggerated.
Then there are the asset sales — the magnitude of which veteran columnist Vaughn Palmer cannot recall ever having seen before. Sales of government assets obviously do not provide a sustainable route to fiscal responsibility. They are one-time only.
What this indicates is that the Liberals are so desperate to show off a balanced budget merit badge in an election year that they will do just about anything. That includes some major spending cuts on environmental and other initiatives (no surprise there) and increases to regressive taxes like MSP premiums (par for the course).
Somewhat unexpectedly, however, the Liberals are also looking to steal the NDP’s thunder by marginally increasing personal income taxes on the rich and nudging up the corporate tax rate.
Well well, look who finally joined the Comintern!
Could it be that demanding a tiny little bit more from those who can most afford to pay does not violate the laws of nature after all, that even a party so business-beholden as our glorious Liberals suffers the occasional impulse to offer policies people actually want? They had better be careful! Election year or no, this could set a dangerous precedent.
In conclusion, this will likely be the BC Liberal Party’s last budget for at least four years — hopefully more — and they have mostly squandered the opportunity for an honourable legacy by tabling a pretty bad one. But it’s not all bad. Credit where credit’s due and all that.
As for the surplus, time will tell.