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By Cariboo-Chilcotin MLA Donna Barnett

Sound Off

SOUND OFF: Storm clouds on the horizon for B.C. government’s books

Oct 11, 2019 | 12:03 PM

IT IS QUICKLY BECOMING CLEAR that after just two years of the NDP in power our economy is feeling the effects of this government’s ineptness when it comes to fiscal management.

Ratings agency Standard & Poors announced this week that they are threatening to downgrade B.C’s AAA credit rating. Our debt-to-revenue ratio is slipping and our defense against economic hardship is greatly weakened. The NDP government’s fiscal plan has eroded B.C.’s resiliency to the next economic downturn.

New and increased taxes is not an economic strategy; there need to be jobs. There needs to be economic growth and stimulus.

And when those jobs start to disappear, like we’ve seen in the forestry crisis gripping dozens of communities, British Columbians and their families start to suffer. And unfortunately, recent updates on the province’s finances show there is nothing better on the horizon.

Finance Minister Carole James recently downgraded her economic forecast by almost a full percentage point, from 2.4 per cent to 1.7 in 2020. The following year was also downgraded to a slightly higher 1.9 per cent.

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Revenues are down too, despite 19 new and increased taxes brought in since the NDP assumed office in 2017.

As nearly all of you will know, most of these tax increases are now in full effect – including the double whammy of Employer Health Tax and MSP – all of which are placing a cumulative burden on the private sector and small business in particular.

Meanwhile the NDP continues to jack up program spending by $10 billion in order to fulfill all of its election promises.

The combination of declining revenues, high taxes and increased spending places British Columbia in a precarious position in the event of even a slight slowdown of the global economy.

This means we are edging very close to a return to the deficit financing that characterized NDP governments in the 1990s.

This is evidenced by the fact that James had to downgrade her estimate of the budget surplus from $274 million to just $179 million in this fiscal year. And this was only achieved by dipping into a $300 million contingency fund.

Even though $174 million sounds like a sizable sum of money, it really represents a razor thin margin compared to total budget spending of $58.2 billion contained in Budget 2019.

So if you were wondering why the provincial government’s rather inadequate response to the crisis in the forest industry doesn’t include any incentives or programs to prevent further job loss, it’s literally because they have run out of money.

Why did they pilfer the Rural Dividend Fund rather than find adequate funding to help the forestry sector? Because they have run out of money.

When the NDP assumed office in 2017, they inherited a $2.7 billion surplus and the best performing provincial economy in the country. Now we are one bout of bad luck away from disaster.

While B.C. once held the title of the lowest unemployment rate since the 1970s, we have now given up that distinction.

All of the jobs lost in the forestry sector in just the past few months are contributing to a three-month straight string of job losses amounting to 16,000 over a very short period of time.

Something needs to change.

Let’s hope the people in Victoria wake up and assemble an economic plan to regain B.C.’s competitive edge.

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Editor’s Note: This opinion piece reflects the views of its author, and does not necessarily represent the views of CFJC Today or the Jim Pattison Broadcast Group.