Families and businesses know it’s important to pay their bills on time, but the government of British Columbia has scrapped plans to balance the provincial budget.
Remember when former finance minister Carole James temporarily suspended the province’s balanced budget legislation until the year 2024? Just long enough to get us through COVID?
Now, the B.C. government has no plan to return to balance. No timeline. Nothing.
Through Budget 2022, the government is piling more debt on to the backs of future generations, wasting more money on interest payments and setting the province on the path to future tax hikes.
Balancing the budget wouldn’t take a heroic feat. In fact, the government could have balanced the budget this year simply by sticking to its own plan. Last year’s budget earmarked $68.6 billion in spending for 2021, while government revenue came in at about $70.2 billion. That would have balanced the books.
But instead of being prudent, the government went overboard with its spending. The government failed to balance the books even though an extra $11 billion in revenue fell into its lap.
Here’s the kicker: the government managed to spend more money even though it had already budgeted about $10 billion more than in normal years.
From the pandemic to floods, there’s no doubt that the province has faced tough times. But the government should still prioritize spending. When a family has a leaky roof, they fix the roof and tighten their belts elsewhere. They would be reckless if they bought new shingles and then used their credit card to blow money on a new flat screen, a few ATVs and a BMW on the way home from the hardware store.
This government is using the fog of COVID-19 to go on a debt-fueled spending spree. By 2025, the government will have increased permanent spending by $15 billion compared to pre-pandemic levels. Spending more money on everything forever is not a prudent approach to managing taxpayers’ money.
Not only did the government fail to balance the budget in 2021, when all it had to do was stick to its own plan, but the government didn’t draw any roadmaps to balance the budget in the future. The best taxpayers got is “gradually decreasing deficits over time.”
More deficits mean higher debt for future taxpayers to pay off. By 2025, the provincial government’s debt is expected to total more than $125 billion. Once you add in Ottawa’s debt, each British Columbian’s share of government debt is estimated to currently be about $50,000.
Debt isn’t free and taxpayers pay the interest charges for the province.
In 2022 alone, taxpayers will lose out on $2.9 billion just to pay the interest on the government’s debt. Those are billions of dollars we can’t use to hire more paramedics in B.C. or keep in taxpayers’ pockets through lower taxes because that money is going to the bond fund managers on Bay Street.
In Budget 2022, the government also gave itself a pass on accountability. Before this budget, ministers would lose 10 per cent of their salaries if the province posted a deficit. That accountability is gone because the government snuck in an amendment to the Balanced Budget and Ministerial Accountability Act to scrap that penalty. Now ministers can run deficits without paying any price personally.
The government isn’t even paying lip service to balancing the books anymore. With ballooning government spending, no plan to balance the budget and no broad-based tax relief to offset the rising cost of living, the 2022 B.C. budget gets a failing grade from taxpayers.
Franco Terrazzano is the Federal Director and Kris Sims is the B.C. Director of the Canadian Taxpayers Federation.
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