Political analyst David Schreck parsed the Campbell government’s Second Quarter Report and noted that promised increases in capital spending aren’t happening, despite everyone seeming to agree that more funding of big projects is needed to help stimulate the flagging economy.

Why the hold-up? “B.C. has an enormous inventory of potential public sector capital projects: earthquake protection for schools, residential care facilities, and the Northeast rapid transit line should be high priorities,” wrote Schreck on his blog, Strategic Thoughts.

“Contrary to popular belief it is not easy to spend billions. Major capital projects require planning and engineering work before any construction workers are hired. More than a month after Campbell promised to accelerate capital spending we still haven't had a single announcement. There aren't shelf-ready projects with all the lengthy preparation work completed.”

But the downturn is fully evidenced in the government’s own second quarter numbers. “Revenues are down primarily because of drops in revenues from personal income tax, business income tax, the sales tax and natural resources. Housing starts and sales are down as are growth projections for the overall economy,” noted Schreck, a former NDP MLA and advisor NDP premier Glen Clark.

Yesterday Finance Minister Colin Hansen renewed his government’s pledge to balance the provincial budget, despite the global financial meltdown buffeting key B.C. industries including tourism, timber, mining, oil and gas.

Schreck faulted not only Premier Campbell but NDP Opposition Leader Carole James for remaining in “denial” and refusing to utter “the D word” even though, he said, deficit spending at the federal and provincial level is “inevitable.”

That had Schreck wondering if the BC Liberals have boxed themselves, and the province, into a budget-slashing corner: “Would a third term Campbell government suddenly behave like the unpopular, service cutting 2001 Campbell government?”

David Beers is editor of The Tyee.