COGGINS: B.C.’s sorry plunge from fiscal leader to financial train wreck

James R. Coggins (www.coggins.ca) is a writer, editor, and historian based in Chilliwack, B.C.Last month the Canadian Taxpayers’ Federation took its “Debt Clock” on a tour of British Columbia to draw attention to the province’s mounting debt. The debt is currently $112 billion and rising by $53 million per week — faster than that of any other provincial government. That’s $20,000 for every British Columbian. The NDP-run province’s credit rating is “plummeting,” according to outside experts, driving up the interest rate it pays on new debt. It is spending $4 billion a year on interest and will soon pay more.This is remarkable — and remarkably bad — for a province that for many decades, prided itself on fiscal responsibility. Mid-20th-century Social Credit governments ran balanced budgets for 20 consecutive years. Gordon Campbell’s Liberal government then outlawed operating deficits in 2001 — and made cabinet members personally accountable for the results — going on to all-but eliminate the province’s operating debt. True, the capital debt and debt of Crown corporations were allowed to increase, raising direct government debt to $43.3 billion and total government debt to $69.8 billion at the end of the Campbell era. High, but still quite manageable for a nearly $400-billion-per-year economy.When the NDP gained office in 2017 under John Horgan, the new government initially did not deviate greatly from Liberal practice. Horgan’s first two budgets continued to promise balanced operating budgets and minimal increases in total government debt.All of that changed with the Covid-19 pandemic in 2020. Revenues plunged while expenditures zoomed. As B.C. emerged from the pandemic, the economy improved and government revenues increased, but spending increased even faster. The 2023-2024 budget projected an operating deficit of $4.2 billion and total government debt rising to $107.9 billion.When David Eby replaced John Horgan as premier and NDP leader in late 2022, things changed even more. The 2024-2025 budget announced in February called for an operating deficit of $7.9 billion and an increase in the province’s total debt to $123.3 billion. It forecast similar deficits the next two years, bringing total debt to $165 billion by the 2027 fiscal year-end.Especially disturbing is that these deficits have no major upheavals to justify them. In 2020, the Horgan government suspended the balanced-budget law for three years to deal with the pandemic. A decade earlier the Liberal government had authorized deficit spending for two years to deal with the 2008 global financial crisis. The NDP permanently removed the balanced-budget requirement in 2022, so Eby’s government is free to ignore it. The projected 2024-2025 deficit of $7.9 billion — incurred in “normal times” — dwarfs any deficit during the previous two crises.The NDP’s uncontrolled spending is a big part of the problem. In 2002, Campbell’s Liberal government forecast operational spending of $25.6 billion. Horgan’s first budget forecast spending of $53.6 billion. Eby’s government forecasts spending of $92.7 billion in 2026-2027, a 73 percent increase in only a decade. The NDP will have nearly tripled B.C.’s debt in only a decade — from $45.2 billion in Horgan’s first budget to a projected $126.5 billion in 2026-2027. Including Crown corporations, total provincial debt will have more than doubled from $69.4 billion to $165 billion.Even more worrisome is B.C.’s weakening ability to repay the debt. By 2017, Liberal governments had reduced direct debt to 15.9% of gross domestic product (GDP) and total government debt to 25.6% of GDP. Under Eby, direct debt is expected to rise to 27.5% of GDP in 2027 and total government debt to 35.8%. Direct government debt will rise from 95.1 percent of annual government revenue at the end of fiscal 2024 to 151.2 percent by the end of fiscal 2027.B.C.’s voters will head to the polls on October 19. They’ll have a lot to think about.In spite of the looming debt crisis, the pre-election election campaign has focused on housing unaffordability, the drug crisis, rampant crime and health-care. Neither in its budget nor on its policy website does the NDP even mention the need for balanced budgets. Nor does the Green Party. The B.C. United Party recently posted a video of leader Kevin Falcon in front of the CTF’s Debt Clock claiming it’s the only party promising to “balance the budget in our first term.” That seems to be a new promise, because the party’s website previously did not mention that goal.Only the Conservative Party of B.C. has shown direct interest in the topic. “It is immoral (and financially hazardous) to continue living beyond our means and leaving our children with the bill,” the party’s website states. “While not immediate, we will plan on balancing the budget.” That commitment to restoring B.C.’s longstanding but recently abandoned fiscal integrity might be one reason why the Conservative Party has gone from no MLAs and about 5 percent popular support to five MLAs and around 37 percent in the polls.Conservative leader John Rustad was the only politician to agree to be interviewed on this topic. Rustad said the widespread indifference to public debt is unfortunate because the debt “is at the core of everything else, all the other issues that we face.” Unless whoever wins the coming election works hard to get B.C.’s financial house back in order, no government will have the means to tackle the other pressing issues.The original, full-length version of this article was recently published in C2C Journal. James R. Coggins (www.coggins.ca) is a writer, editor, and historian based in Chilliwack, B.C. .This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. 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COGGINS: B.C.’s sorry plunge from fiscal leader to financial train wreck

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