FIRST READING: B.C. stacking up sub-national debt faster than anywhere else in North America

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However, less than two years after the beginning of COVID lockdowns, Horgan was able to restore the provincial budget to surplus. In 2022/2023, B.C. took in $704 million more than it spent.

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What changed was Horgan’s replacement in November 2022. In his tenure so far, Premier David Eby has presided over the fastest rate of debt accumulation in the province’s history.

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B.C. is running up these record deficits despite the fact that provincial revenues are now being padded by a sharp increase in royalties from natural gas.

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LNG Canada, the country’s first LNG export facility, opened last year on the B.C. coast.

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In fact, B.C.’s budget deficit came in about $1.5 billion higher than expected because the province’s Ministry of Energy and Climate Solutions had initially miscalculated the expected amount of natural gas royalties.

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This is also a particularly bad time to be taking out record levels of provincial debt, with rising interest rates spiking the cost of debt servicing.

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When Eby took office, B.C. paid about $2 billion per year in interest charges. It’s now triple that, with this year’s debt servicing costs expected to top $6.3 billion.

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This week, two former B.C. finance ministers told Postmedia that B.C.’s current rate of debt accumulation was unsustainable.

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“The engine of growth can’t be the public-sector jobs, because it seems to me that in the last few years, the public sector has grown disproportionately, and of course the deficit has just ballooned after Horgan,” Ujjal Dosanjh, NDP finance minister in the 1990s, told the Vancouver Sun.

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IN OTHER NEWS

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The B.C. Conservative Party has recently undergone what could charitably be described as an uncontrolled implosion. Just a few months after new leader Kerry-Lynne Findlay took the helm in May, the B.C. Conservatives lost a total of nine MLAs. When accounting for MLAs who quit the party even before Findlay assumed the leadership, this makes 14 MLAs who now sit as independents after being elected as B.C. Conservatives. Despite this, they’re not polling as badly as one might assume. The above Angus Reid Institute numbers have the Conservatives just four points behind the incumbent NDP.

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There are two potential snap elections in the air, fuelled by no other purpose than the fact it would allow an incumbent government to capitalize on a brief (and potentially fleeting) moment of electability.

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According to the National Post’s John Ivison, members of the Carney government (although not Prime Minister Mark Carney himself) are pressing for a snap election that would be likely to devastate the Conservative caucus and enshrine a majority Liberal government to the end of the decade. The impetus? Liberal popularity that is riding high after the failure of trade talks with U.S. President Donald Trump.

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And B.C. Premier David Eby appears to be contemplating the same, dropping hints like “we’re election ready” at press conferences. Although Eby’s motive isn’t so much his own popularity, but the chaos that’s overtaken his chief opponent, the B.C. Conservative Party.

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Snap elections called for the apparently cynical purpose of consolidating an incumbent government’s power have largely worked out as expected in recent years.

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Although there is the occasional phenomenon of Canadian electorates punishing politicians for having summoned them back to the polls too soon. One of the best-known examples dates to 2011, when the opposition to then Prime Minister Stephen Harper triggered an election call, only for said election to give Harper his only majority.

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As discussed before in this newsletter, the defending CAQ government in Quebec is attempting to distance itself from the party’s longstanding unpopularity by simply pretending not to be the CAQ (all the campaign literature instead calls the party Équipe Christine Fréchette). This led one vandal to roam Montreal and slap CAQ signs with stickers carrying the CAQ logo.

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First Reading is a Canadian politics newsletter curated by the National Post’s own Tristin Hopper. To get an early version sent directly to your inbox, sign up here.

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