Vaughn Palmer: Numbers contradict B.C. finance minister's optimistic tone

BC Finance Minister Josie Osborne. Photo by Chad Hipolito /POSTMEDIA

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VICTORIA — Finance Minister Josie Osborne attempted a positive spin in her first budget update, starting with a claim that “B.C’s economy continues to be resilient, with stable growth in the outlook.”

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Alas for the new minister, she was contradicted by key numbers in the quarterly report that accompanied her presentation in the legislature press theatre on Monday.

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February’s budget forecast a meagre 1.3 per cent rate of economic growth for the year. Turns out that was overly optimistic.

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Osborne lowered the forecast by about a third to 0.9 per cent, which does not say “strong” and “resilient” to anyone.

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Housing starts were down. Population down. Jobs down. Unemployment was up.

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The only area to show really impressive growth was the deficit.

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Osborne inherited a record deficit forecast of $13.3 billion from her predecessor, Brenda Bailey. Monday, she increased it to $13.8 billion.

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As NDP finance ministers are wont to do, Osborne noted in passing that the budget included $5 billion in unspent contingency funds. It is the NDP way of holding out the hope that the unspent portion might be used to reduce the deficit at the end of the year.

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Except the New Democrats treat contingency funds like giant blank cheques, to spend as they see fit on topping up existing programs and creating new ones.

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Last year’s budget included $4 billion for contingencies and the government spent 85 per cent of it. Only a small fraction was spent responding to genuine emergencies like wildfires and floods.

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Osborne fell back on another well-travelled NDP line, namely that B.C. “debt metrics” are better than those of other large provinces. (Alberta excepted).

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You have to wonder how long the comparison will stand up.

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Take the cost of servicing the accumulated debt. In the last year under Premier John Horgan, debt servicing costs actually dropped because Horgan did believe in balancing the budget.

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Under David Eby, debt servicing is the fastest-growing drain on the provincial treasury. Interest payments are already double what they were under Horgan and they will be triple the year after next.

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In this year alone, debt servicing is growing at a rate of almost 30 per cent.

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Is that remotely sustainable? I asked Osborne. She sidestepped the question.

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A colleague asked about David Eby’s promise, after winning the last election, to put the province “on a path to a balanced budget.”

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Was there such a path?

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She couldn’t point to one. She did not even try.

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Osborne passed up one opportunity to share the blame around when she was asked about the hit the budget sustained on natural gas royalties.