Maureen Bader: B.C. government has spending problem, not revenue problem

B.C.’s deficit is spiraling out of control, but not because of what the government wants you to believe. Although the finance minister claims the return to deficit spending is because of a huge fall in revenue, a closer look at the books shows it is actually because of a huge increase in spending. If the government spending spree is not brought under control, current and future generations will be left with a legacy of debt and higher taxes.

B.C.’s new budget, released on September 1, shows the deficit spiraling to $2.8 billion in 2009-10. B.C.’s finance minister said this is because “we are facing a loss of $2 billion in expected revenues in the current fiscal year”. How interesting it is, then, to look at the B.C. budget and see expected revenues falling by only $720 million in the current fiscal year. Darn those pesky numbers.

So if revenues aren’t down by as much as the government says, just what is sending B.C.’s deficit to new heights? Out of control spending. Government spending has skyrocketed to $40 billion in 2009, up $2 billion from 2008. If the government had held spending at 2008 levels, the deficit would have been $642 million, not all that much more than the original estimate. So the massive $2.8-billion deficit is a result of a spending blow out, not falling revenue.

The deficit adds to an already huge debt, which is expected to balloon to $53 billion by 2013, up from $38 billion in 2008. This move in the wrong direction creates three problems: higher debt servicing costs; young people left saddled with a financial burden they didn’t create; and once the boomer generation retires, there won’t be enough taxpayers working to pay the taxes to finance the debt and pay the pension benefits of future retirees. This spending spree endangers the retirement security of the boomer generation.

Debt servicing costs are exploding. In 2009, B.C. taxpayers are paying $6 million per day to service the debt, and if spending is not brought under control, that will rise to almost $7 million per day in 2010, and almost $8 million per day by 2013. Hard-earned dollars that could go to pay for services people want, or better yet—left in peoples’ pockets—go to bankers and bondholders to pay the interest on the debt.

We can’t expect future generations to take on a massive tax burden for spending they didn’t vote for to get things, like billion-dollar convention centres or fast ferries, they probably won’t want. In 2008, each person in B.C. owed $8,341 for their portion of the provincial debt. In 2013, that will rise to $11,291. Is it right to leave a fiscal hangover to unborn children to pay for our free-spending ways?

The demographic reality is that we’ll have fewer and fewer young people paying into the system through taxes, relative to those taking out. According to B.C. Stats, the number of people aged 15-24 will drop by 2.5 percent between 2009 and 2029 while the number of people 65 years and older will almost double. Tomorrow’s taxpayers left to foot today’s bill will strain under an unsustainable tax burden unless spending is brought under control.

Dropping the fiscal fantasy shows the B.C. government has a spending problem, not a revenue problem. If we care about the well-being of our children and grandchildren and want to leave them with something other than a legacy of debt and higher taxes, we need to turn the direction of government spending around, get rid of the deficit, and start reducing the debt.

Maureen Bader is the B.C. director of the Canadian Taxpayers Federation.




Sep 10, 2009 at 6:15pm

Somehow Maureen in your zeal to cut out school lunches for starving kids and put welfare moms, the sick and the infirm out on the street, you've forgotten about the tens of billions in tax cuts your fascist friend handed out to big business and high income earners. Clawing that all back would sure fix the that little revenue problem now wouldn't it.

And on the expense side, why doubling BCHydro's rates to pay ludicrous power stipends to BCLiberal party hacks in the instant IPP business would be an excellent place to cut. And what about that other 50 billion or so of cleverly disguised debt obligations, in unconscionably lucrative PPP commitments. Another excellent place to cut - whoops no can do already signed, This government does not cancel signed contracts now does it.


Sep 10, 2009 at 10:09pm

Ha ha, good one!


Sep 11, 2009 at 12:31pm

CTF: please be kind enough to publish a complete list of donors. Thanks.

Ed Deak

Sep 11, 2009 at 7:46pm

How is it that back in the 50s and 60s businesses have been making profits, new businesses were starting every day training and employing skilled people who had wages they could buy houses, vehicles, feed their families from their wages? Executives were making $25 or 50,000 and were happy with it, we had tariffs on imports. There were no homeless, no foodbanks. Canada was becoming wealthier and more self sufficient by the day, and the standard of living was going up all the time?

Now we have a "globally competitive free economy and free trade". The biggest lie in history. Our manufacturing has been destroyed, and were selling the country from under our feet, while claiming "growth", while we're being colonized and enslaved with the power of imaginary money, created from the blue by some banks.

The economy has been handed over to bolshevik international mega corporations who are stealing and destroying everything and everybody while raking in incredible profits? Their executives are stealing tens of millions from the public's pocket in wages, but they can't afford to pay taxes, or decent wages and are blackmailing governments for more of the same, or else........

Does any idiot, apart from the priesthood of the Money God, the so called "economists", still believe that this is what an economy should be about ?

Have people gone completely mad to permit a fascist ruling sector to screw them and ruin their lives ?

Ed Deak, Big Lake


Sep 11, 2009 at 10:33pm

Your argument would be more persuasive if you actually mentioned somewhere where all this spending was taking place specifically.


Oct 10, 2009 at 1:28pm

I always wondered why lefties seem to have such a hard time with the idea that you can't "just go and print money' to solve problems, nor spend your way out of them? Just read the moronic reader comments in this rag, and it will be the last time believe me, but now I can see why. Just goes to show how many over-educated, under-intelligent, under-achieving losers there are out there, mostly being cranked out by Sociology, Education and other Arts departments.