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CCPA: '2010 BC Budget is underwhelming'

The Canadian Centre for Policy Alternatives isn’t much impressed with the new provincial budget: “For a document titled Building a Prosperous British Columbia, the 2010 B.C. Budget is underwhelming in its ambition.”

Writing in Policy Note, the CCPA’s blog, Marc Lee and Iglika Ivanova dissect the budget in detail:

The budget’s priority is to show a reduced deficit for 2010/11, funded by a smattering of spending cuts that will not help the province’s overall economic situation. This drop in the deficit by $1.2 billion (from $2.65 billion in 2009/10 to $1.4 billion in 2010/11) is partially offset by increased capital spending. So, a check mark for accelerated capital projects that push the total envelope to $5.4 billion in 2010/11 for taxpayer-supported projects (up from $4 billion in 2009/10).

There is a drop in other (self-sustaining capital projects), but an overall increase in total capital spending to $8.2 billion. Not all of this is well spent, such as $390 million this year for the BC Place roof upgrade.

The budget heralds a return to conservative budgeting practices, with numbers set out in a way that ensures the government will outperform the targets. Barring a major economic collapse, BC will rebalance the budget sooner than the stated 2013/14. For example, the budget estimates a deficit of $145 million in 2012/13, peanuts relative to more than $40 billion in revenues. But if resource royalties bounce back (as higher commodity prices seem to indicate) the shift back to surplus could happen even further ahead of schedule.

A number of ministries saw budget cuts, led by the Ministry of Forests and Range, with a one-year cut of 35% (a drop from just over $1 billion in 2009/10 to $641 million in 2010/11, and this is on top of previous cuts. This will hurt in smaller communities around the province. Other ministries received cuts that were small by comparison, typically in the tens of millions of dollars. Translated into public sector jobs, there is a continuation in the reduction in full-time equivalents (FTEs) from a peak of 36,277 workers to 32,000 by 2012/13.

...Funding increases in education and social services are small, barely keeping up with inflation and the increased downloaded costs. There are some additional funds for full-day kindergarten, and an additional $26 million over three years on child care subsidies for low and middle income families, but no new operating funding to enhance the accessibility of child care spaces.

The analysis concludes:

The budget announces additional ministry cuts to the tune of $320 million over the next three years. This comes on top of previous cuts announced last year – a total of $3.3 billion over three years in “administrative and other savings.”

BC’s public service is already the leanest in the country as this recent CCPA brief shows and it is wishful thinking to assume that these cuts can be made without compromising much-needed public services.

Crawford Kilian is a contributing editor of The Tyee.

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