By Laura Jones, Vancouver Sun Columnist
Published January 25, 2016
On Feb. 16, Finance Minister Mike de Jong will be tabling the provincial budget. I predict it will be boring.
It’s not yet time for the budget before the election, where governments tend to work hard to make everyone happy. We have to wait until next year for that. The only interesting political musings related to this year’s budget centre on housing affordability, but a projected surplus of just $376 million on a $46-billion budget (less than one per cent) doesn’t give the government room to offer substantial relief.
Another safe prediction: The boring budget will get a lot of media coverage because it is a budget, and budgets, even boring ones, tell us something about a government’s priorities. The B.C. government, for example, have been reasonably consistent in balancing its budgets, a trend that the majority of small business owners believe should continue. Over the past 11 years, it has posted seven balanced budgets (the only province to balance its budget more frequently is Saskatchewan, at eight). For comparison, Ontario had three surpluses followed by eight consecutive deficits over the same time period. Last year, only B.C. and Quebec managed to balance their books.
As tempted as I am to wax poetic about the virtues of balancing the budget, I will limit myself to the reflection that it is irresponsible to spend today and expect our kids to pay tomorrow.
Budget documents include growth forecasts and assumptions about important economic indicators, such as the price of natural gas and the interest rate that affect our fiscal fortunes. Currently, both the Bank of Montreal and the Royal Bank are predicting that B.C.’s 2016 real growth will be higher than other provinces, at 2.6 per cent and 3.1 per cent respectively. Unfortunately, we still face the reality that we are living in a world of uncertainty and slower growth, where the gap between our desires and the government’s ability to deliver on them is growing. If you doubt this, listen to the long list of post-budget complaints on the problems we need to do more about. It typically includes everything from affordable housing to shorter wait times for surgeries.
Some argue that raising taxes on existing businesses and citizens can close this gap, but that approach has several limitations, including creating a disincentive to growth and worsening affordability issues. Others suggest that we should run deficits to close the gap, but even if you assume our kids would forgive us, that is only sustainable for so long.
The other option is to generate more revenue through economic expansion. This brings us to another budget reality: B.C.’s economy benefits from a diverse natural resource sector. Growth in this sector is a real possibility. Of course, new resource projects are not without their vociferous supporters and detractors.
Small business, often a good barometer of the common sense found between the extreme voices given so much public play, overwhelmingly support further developing the province’s resources, as long as there are appropriate environmental safeguards in place — a boring headline to be sure. Most support new pipelines as long as Premier Christy Clark’s five conditions are met. Nine per cent don’t think the LNG industry should be developed in B.C., while 65 per cent are concerned that the province might lose an opportunity if the government does not move fast enough on LNG.
Were the provincial government to get more money from new resource projects, small businesses, like many of the rest of us, would like to see it spent on improving health care, transportation infrastructure, and reducing the PST. Now wouldn’t that be an exciting budget?
Laura Jones is executive vice-president of the Canadian Federation of Independent Business.
This story was originally published in the The Vancouver Sun