I can tell you this: the deficit for 2009-2010 will be $495 million maximum. -- Premier Gordon Campbell, April 23, 2009
The BC Liberals have a new plan to stimulate the provincial economy -- make British Columbia the "Financial Fudge Budget" capital of the world.
Finance ministers from around the globe will travel to Victoria to learn at the feet of the masters -- Premier Gordon Campbell and Finance Minister Colin Hansen -- about how to craft the slipperiest, most expensive fudge ever seen.
That's the only conclusion one can draw from the most astonishing, outrageous and massive fudging of the B.C. budget in provincial history -- and all done during an election campaign.
So while Campbell said that if re-elected, the 2009-10 budget tabled in February with a $495 million projected deficit will be "pretty much the budget that’s reintroduced", not even the premier's closest corporate allies believe him.
Jock Finlayson, the B.C. Business Council executive vice-president, says he would not be surprised by a $2 billion deficit -- and Finlayson sits on the province's own council of economic forecasters.
Bank of Montreal Deputy Chief Economist Douglas Porter agrees with Finlayson, saying he could "easily foresee a deficit of that magnitude."
And last year's so-called balanced budget for 2008-09 could also have a deficit, says Helmut Pastrick, chief economist for Central 1 Credit union.
Pastrick has said consistently from February on that B.C.'s deficit would be much larger than projected and most recently predicted it would be about $1.5 billion.
What all this BC Liberal fudge means for ordinary and particularly lower income British Columbians is not a sweet treat but a bitter pill to swallow as the government begins dramatically slashing public services.
For even if Campbell decides to temporarily run a much bigger deficit than he promised to deliver, it will still require massive spending cuts and/or a significant tax increase to keep the red ink from staining the BC Liberals permanently pink.
And given that Campbell introduced a 25 per cent tax reduction when he came to power in 2001 and has steadfastly maintained that such reckless cuts stimulate the economy, don't expect him to hike taxes on business or high income earners.
When previously in a jam, facing an impending shortfall in 2002, Campbell stuck to his tax cutting rhetoric even as he was forced to claw back hundreds of millions of dollars in revenue from ordinary British Columbians. How? By increasing their B.C. Medical Services Premiums by 50 per cent, eliminating several medical services and imposing a host of onerous user fees that are still in place today.
The BC Liberals have already promised to cut $2 billion in spending over three financial years through "administrative and other savings" and "efficiencies" -- want to bet that number goes way up along with the deficit?
Downsizing battles loom
There's another big factor -- almost all public sector union contracts expire shortly after the February 2010 Olympic Games – and with B.C.'s economic disaster status at that point, expect a nasty round of bargaining as the government tries to downsize employees faster than a bobsled on pure ice.
That's one reason Campbell and Hansen hope to delay tabling a new budget in the Legislature for as long as possible -- to give themselves more "wriggle room" and more time to blame the world-wide economic crisis instead of their own inability and unwillingness to acknowledge the situation long before the election.
But will we see business groups up in arms like they were when the 1996 NDP government brought in a $355 million deficit when it had projected a balanced budget in that year's election? Will the National Citizens Coalition again finance court challenges against government fraud?
Not a chance -- but these hypocrites should be embarrassed when their own business-funded BC Liberals' fudge make the NDP's past mistakes look like penny candy.
Related Tyee stories:
- McMARTIN: This Budget Is Toxic Fudge
B.C.'s government is in denial about the economic realities we face.
- Province's Economy Much Worse than We Were Told
New StatsCan numbers likely mean bigger budget deficit or spending cuts: experts.
- BC's Education Budget Faces 'Structural Shortfall' School trustees, administrators sound alarms.
Read more: BC Votes '09: Your Issues