Provincial budget may foretell "postelection cutbacks"

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      The B.C. Liberals have unveiled their budget, and one pundit hopes that Premier Gordon Campbell hasn’t borrowed a page from the playbook of former Social Credit premier Bill Bennett.

      Norman Ruff, a retired UVic political-science professor, recalled that the economy was also going through a recession before Bennett faced voters in the 1983 election. But whereas Campbell is required by law to lay down an annual budget on the third Tuesday of February, Bennett faced no such compulsion. The Socred leader delayed the budget until he had won another mandate. What followed was a restraint program that slashed government spending and triggered protests and work stoppages that almost culminated in a general strike. Although the B.C. Liberal budget for 2009-2010 doesn’t involve drastic cuts, Ruff isn’t sure whether this will hold true if Campbell wins another majority in the May 12 election.

      “I hope there is not a parallel between the two, because it was clear that the [Bennett] government was being forced into a deficit situation, and there was a serious situation in the economy, but the really draconian cuts that came in the restraint budget didn’t occur until after the election,” Ruff told the Georgia Straight.

      Citing the events of the 2005 election year, Ruff said there isn’t enough time now to pass the budget before the legislative assembly is shut down in mid April for the election-campaign period.

      The B.C. Liberal budget projects a deficit of $495 million for 2009-2010, and one of $245 million for 2010-2011. According to Ruff, though, if these estimates prove to contain low-ball figures, the prospects of “postelection cutbacks” are more real.

      The budget also includes cutbacks in government spending on travel and advertising for next three years, which will generate an estimated $1.9 billion.

      However, Marc Lee, senior economist at the B.C. office of the Canadian Centre for Policy Alternatives, pointed out that about half of that amount has not been fully accounted for, in terms of where the cost savings will be made.

      On top of that, Lee said the government acknowledged in its three-year fiscal plan that it would need to generate “further efficiencies” to meet its own target of balancing the budget in 2011-2012. To do that, it has to find cuts totalling $125 million in 2010–2011 and $250 million in 2011–2012.

      “There’s a lot unsaid there about what that means,” Lee told the Straight.

      Lee also said the budget appears to have been crafted in a way that is “almost deliberately bland, to convey a sense of ”˜We’re responsible economic managers in difficult times,’ and part of that message is to say ”˜We’re doing our own belt-tightening too, and we found these $2 billion.’ ”

      SFU economics professor Richard Harris pointed out that the current recession is likely to be worse than the one during the Bennett years of the 1980s because of the global financial downturn. “The provinces are going to have an enormous decline in revenues if the recession continues to worsen,” he told the Straight. “Whatever they’re going to do, they’re going to run big deficits.”

      Harris added that the B.C. Liberal government’s promise not to cut spending on health and education isn’t set in stone. “Who knows?” he said. “I don’t think any government—it doesn’t matter what party they’re from or who they are—can say with any certainty where we’re going to be in six months from now. I don’t think it’s possible under the present circumstances.”

      Among the protesters against Bennett’s restraint budget in 1983 was Fred Muzin, then a young worker at Vancouver’s St. Paul’s Hospital. Muzin later rose to become president of the Hospital Employees’ Union, a post he held for 15 years until he retired in November of last year.

      Muzin told the Straight that the B.C. Liberal government will understandably be cautious before an election. “What they plan on doing if they were reelected, I don’t know,” he said.

      What he remembers is that six months after winning the 2001 election the B.C. Liberals introduced Bill 29, a piece of legislation that basically ripped up the contracts of health-care workers, leading to layoffs and massive pay cuts. Sections of this law were declared unconstitutional by the Supreme Court of Canada after years of litigation.

      “We know they have a history of being mean-spirited,” Muzin said. “I don’t think their ideology has changed.”

      Economic cycles in British Columbia

      > Economic growth in 1982 downturn: -6.1 percent

      > Economic growth in 1991 downturn: 0.2 percent

      > Economic growth in 2001 downturn: 0.6 percent

      > Projected growth in 2008: 1 percent

      > Projected growth in 2009: -0.9 percent

      > Projected growth in 2010: 2.4 percent

      > Projected growth in 2011: 2.6 percent

      > Projected growth in 2012: 2.6 percent

      > Projected growth in 2013: 2.6 percent

      Source: Budget and Fiscal Plan 2009/10–2011/12

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