This piece by ICBA VP-Communications Jordan Bateman was first published on The Orca Feb. 19, 2019.
It was a day of re-announcements and pre-announcements in B.C.’s 2019/2020 provincial budget.
Finance Minister Carole James spent a lot of time recapping last year’s budget measures before dangling a few carrots – mainly for B.C. families – next year. (If you’re a spring election truther, this gives your theory ammunition – the NDP could run for re-election on a child tax break.)
But the clearest message in this year’s budget is that the NDP think B.C.’s economic growth will continue unabated – despite warning signs from other world economies and in our own statistics.
While they post a modest surplus of $274 million on a $59 billion budget spend, the NDP borrow at almost Trudeau-like rates: adding $14.4 billion in new debt over the next three years. That’s a staggering $400 million per month.
Typically, governments borrow in bad times, not good ones. James is taking the opposite tact, which means less flexibility in future years, if the economy turns sour.
Housing starts are a leading indicator for the provincial economy. Buried deep in the budget documents is a concerning stat: starts will drop a third from 43,664 in 2017 to 30,517 in 2021. This undercuts the NDP’s professed desire for housing affordability by limiting supply. It also puts thousands of construction jobs at risk.
Incredibly, despite this one-third drop in new housing, the NDP Budget claims the property transfer tax will remain steady at $1.9 billion per year. This almost beggars belief.
Further, the NDP are predicting a billion-dollar turnaround at both ICBC and BC Hydro. After ICBC lost $1.18 billion this year, they say ICBC will only lose $50 million next year. Further, BC Hydro will move from a $424 million loss to a $712 million profit, in one year. So, brace yourselves for big rate hikes at both.
There was no money in the budget for a Massey Tunnel replacement, no Surrey SkyTrain, no Highway 1 expansion east of Langley. This is where the NDP’s sweetheart deal with its friendly Building Trades Union bites them.
Even the Transportation Minister has previously said this monopoly will add at least 7 per cent to the cost of major construction projects; other estimates from groups like the Canadian Federation of Independent Businesses, have been as high as 40 per cent. Instead of trying to stretch every taxpayer dollar as far as it can to get the best value, the NDP Government is continuing its terrible plan to feather their union buddies’ nests. Overspending on a few select projects means no money for these other pieces of necessary infrastructure.
But the biggest issue is the lack of preparation for an inevitable downturn. Asian economies are slowing, and the U.S. is coming back to earth after a couple of years of overperforming. Red tape, higher taxes and roadblocks against investment will affect B.C.’s economic performance.
Winter is coming, but the BC NDP is taxing, borrowing and spending like they don’t have a care in the world.
