B.C. Finance Minister Kevin Falcon, like a cliché movie hero, is slowly sinking into quicksand. In his recently released quarterly fiscal report, he told British Columbians that economic growth has slowed, Crown Corporation revenues are down and the provincial deficit is exploding. The true culprit -- runaway spending -- has yet to be addressed, putting the B.C. Liberals in danger of electoral oblivion in the next election.
What was once planned to be a $925 million deficit this year has ballooned to $3.1 billion. Next year's expected $440 million deficit could top $1 billion and the likelihood of returning B.C. to surplus budgets in 2013-14 is now hanging by a very thin thread.
Falcon is saying that he won't know until January -- just weeks before the 2012-13 budget is due -- if he can balance the books by 2013-14, as repeatedly promised over the past two years.
The finance minister knows the stakes better than anyone. As B.C. Liberal voter support continues to diminish, Falcon knows a balanced budget is the only way to go into the 2013 election with any fiscal management street cred.
The core of the B.C. Liberal cabinet also understands this. During the leadership campaign a year ago, Premier Christy Clark committed to "balancing the budget by 2013-14 or sooner." So did Falcon.
Former leadership contestant and current Health Minister Mike de Jong oversees 43 per cent of government spending, by my calculation. His wistful comment, "At times, I have felt like I was the only candidate in this leadership race talking about the deficit and the need for balanced budgets," seems like it was uttered years ago, but it came in February. Education Minister George Abbott, presently negotiating an expensive contract with the B.C. Teachers Federation (BCTF), said this about a balanced budget in 2013-14: "I believe that objective is achievable." The rubber hits the road on contracts like the BCTF's.
Clark sums her political philosophy up as "Families First," but leaving a legacy of debt for B.C.'s children and grandchildren is not family-friendly. The present generation is making a conscious decision to spend the future generation's money -- taking economic opportunity and prosperity from our kids and spending it on ourselves.
Four months ago, Falcon said government needed to tighten its belt. He's right: the deficit is a spending problem, not a revenue one. In 2001-02, the B.C. Government spent $24.3 billion. This year, they are spending $43.6 billion.
When expenses skyrocket like that, everything needs to go right economically for a government to stay on track. It hasn't, and now the B.C. Liberals have 18 months to fix things or face the electoral guillotine.
The fall legislative session has just wrapped up and the government caucus has a shiny new website highlighting their achievements. Notable in its absence is any mention of Falcon's directed belt-tightening. Is it even happening? The air ambulance service is still delivered in an expensive, outdated model. Public sector executives still get massive severance packages and bloated pensions. Government cronies still get well-paid appointments to boards and panels.
The premier and cabinet already take a 10 per cent pay cut when the province is in deficit, according to the Balanced Budget and Ministerial Accountability Act. If they don't find a way to get spending under control, their salaries will plummet even further -- many will find themselves out of work in May 2013, while others have to adjust to their new opposition member's wage.