Vancouver Sun

Vaughn Palmer

Premier depending on LNG windfall that won’t be realized until 2017, if then

- VAUGHN PALMER vpalmer@vancouvers­un.com

There was Premier Christy Clark Monday, dedicating herself to the goal of a “debt- free British Columbia,” and telling reporters that debt reduction has always been “a central value for me.”

Alas for Clark and her B. C. Liberals, the record of her time in office, reflected in the audited financial statements combined with her government’s three- year fiscal plan, tell a radically different story.

Clark took the oath of office as premier two weeks before the March 31 end of the 2010- 11 financial year. The provincial debt, including borrowing by central government and its Crown corporatio­ns and agencies, stood at $ 45 billion.

Her predecesso­r, premier Gordon Campbell, having inherited a debt of $ 34 billion from the previous New Democratic Party government, had slowed the rate of borrowing during his second term as premier.

But after the 2008 global financial crisis, it began growing again, and Clark did nothing to slacken the pace. In her first two years, her government added $ 11 billion to the debt, the biggest jump in dollar terms in provincial history.

Nor did she reverse the trend with the budget and fiscal plan tabled in the legislatur­e in February this year.

The plan called for three balanced budgets on the operationa­l side, meaning no cause to borrow more money to fund ongoing programs like health care, education and other government services.

But Clark and her colleagues continued to budget for a huge increase in borrowing for capital projects, including the ambitious rebuilding of the BC Hydro network, the Port Mann Bridge and other transporta­tion projects, and numerous schools, hospitals, college and university buildings, and other public works.

Altogether, the Liberal plan proposes to add $ 6 billion to the total provincial debt this year, $ 4 billion in the financial year beginning April 1, 2014 and $ 3 billion the year after that.

So the premier who wishes to be recognized for a commitment to make the province debt- free is in fact proposing to increase the provincial debt by $ 13 billion over three years, having already increased it by $ 11 billion.

Or, to put it another way, the leader who supposedly holds debt reduction as one of her “central values” would — presuming her government were to be re- elected — preside over a plan to raise the debt to $ 69 billion, a better-than-50- per- cent increase over where it stood when she took office.

Give her fiscal purity, Lord — just not yet.

Clark’s debt- eliminatio­n plan, as sketched out in the Liberal election platform released Monday, relies on the government being able to tap the anticipate­d windfall from developmen­t of an industry to export the provincial natural gas resource in liquefied form to Asian markets.

LNG developmen­t is much needed in terms of shoring up provincial resource revenues. But there are many ifs to the scenario, well- intentione­d though it is.

Even in the best- case outcome outlined by the B. C. Liberals, the revenue would not start flowing into the envisioned B. C. Prosperity Fund until 2017 at the earliest. Therefore, Clark is running this year on the promise of a windfall that won’t come to fruition until the election after this one, if then.

Nor was that the only absurdity in the platform.

She trumpeted a plan to reduce the small business tax from the current 2.5 per cent to 1.5 per cent “no later than” the 2017 financial year. That one should also be footnoted against the record.

On the eve of the last provincial election, the Liberals pledged to lower the small business tax to zero, wiping it out altogether, effective April 1, 2012.

Clark inherited that schedule when she took office in 2011 and promptly abandoned it as part of the struggle to balance the budget, leaving the rate at 2.5 per cent.

Thus on Monday she invited business leaders to celebrate the prospect that four years from now, the small business tax rate will be reduced to a level that would still be 1.5 points higher than where it should have been this time last year, if the Liberals had kept the promise they made in the last election.

Her election platform also included the promise of a “core review” of all ministries as part of an effort to contain spending, cut costs and eliminate programs and services that are deemed to be not an essential part of the core services of government.

Say, didn’t the Liberals already do one of those?

Yes, after the 2001 election. They launched a second one in all but name starting in 2008, which has to date led to the reduction of the equivalent of 6,000 full- time positions in the public service.

But the core review was part of a theme that “everything old shall be new again,” along with the commitment­s to cut red tape — now there’s a fresh idea! — freeze taxes and restore balanced budget legislatio­n.

What won’t these Liberals think of next: open cabinet meetings? A waste buster website?

Joking aside, at the same time as the premier invokes the darker aspects of the NDP time in office in the 1990s, she would appear to be counting on the voters to have short memories of the Liberal record.

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