By Mike Archer. I am the last person who would accuse Mike de Jong of being an unskilled politician. As the second most powerful politician in BC outside of the Premier’s office, he has earned his reputation as a masterful political fixer.
But why the newspaper media insists on helping him sell his magical abilities at balancing budgets is beyond me.
In an editorial that might as well have been written at BC Liberal Party headquarters, [Balanced budget laudable but comes at a cost] the Vancouver Sun this week praised De Jong and Premier Christy Clark for balancing the province’s books and protecting our credit rating.
[excerpt] So it is fair to say B.C.’s premier has earned her bragging rights in crowing about this province’s plan to balance its budget.Looking ahead to a Throne speech set for Tuesday, Christy Clark boasted recently that only B.C. and Saskatchewan plan to unveil pristine ledger books this year.
She attributed B.C.’s fortunes to a diversified economy that supports a high-tech sector, mining, fishing, agriculture, manufacturing, construction, forestry, tourism and, by 2020, three possible LNG projects.
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The full-length (17-paragraph) editorial contained one paragraph devoted to a self-serving and selective list of the costs of the government’s magic act.
- Teachers unable to achieve salary gains
- A lack of support for the Lower Mainland’s transportation infrastructure improvements
- The business community’s demand for redress over the botched GST fiasco
- BC’s singular achievement of being the only province which requires citizens to pay for healthcare
A pretty short list.
If the Liberal Party were enumerating the costs of its balanced budget, it couldn’t have come with a shorter or more self-serving list of soft costs presented in a manner with which most readers would agree.
Missing among the long list of costs to the Liberal government’s fiscal management are:
- Run down and deteriorating hospitals and health care services
- A growing lack of investment in primary and secondary education
- A growing lack of investment in post-secondary
- The downloading of costs of government services and programs onto users who are already paying for them with their taxes
- Some of the highest child poverty rates in Canada
- The transference of short-term debt to a massive long-term debt that would shock taxpayers if they knew more about it
Then, after downplaying the costs the government’s balanced budget which it has chosen to list, the Sun summarizes its support for the Liberal Party by bringing it all down to one element – borrowing costs and by equating the Liberal brand with the BC brand.
[excerpt] But, at the same time, as the finance ministry’s consultation paper notes, the fiscal discipline is responsible for B.C. being able to maintain a triple-A credit rating which saves millions each year on borrowing costs.A record of good fiscal management helps not only the political brand of Clark’s Liberal party, it helps the B.C. brand.
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Debt servicing is an interesting factor upon which to focus if only because it raises the question of just how this government has managed to balance its budgets for years. How was it we managed to spend over $4 Billion on a two-week winter party (Winter Olympics) which has not resulted in anything like that amount of return.
Interested taxpayers might find some answers to questions like that by looking at the way we pay for the government’s balanced budgets.
As the sole shareholder in BC Hydro, the BC government has been tapping the public utility for years in order to maintain the falsehood and the perception of a balanced budget. This government has been borrowing from itself and hiding those costs for years by bleeding crown corporations and public utilities like ICBC and BC Hydro dry.
The utility, which is going to be forced to raise electricity bills by as much as 15 percent or more in order to pay for both its own illegal theft from the citizens of California during the Enron scandal and the government’s use of its funds like a piggy bank, is, for all intents and purposes bankrupt.
But not just bankrupt. This is bankruptcy on a gargantuan scale.
The BC Liberals may benefit from a balanced budget (with the help of the Vancouver Sun’s cheerleading) but it is a magical twist of the truth on a grand scale for the media to describe the ‘BC brand’ as somehow benefitting from this nonsense. The government of BC – which the media and the politicians consistently forget belongs to British Columbians – will have to pay a minimum of $5 Billion and more like $30 – $40 Billion for Mike’s political slights of hand as Finance Minister.
Mike de Jong may be a brilliant and successful politician. But to pretend that what he has done as Finance Minster, in pretending to balance our books, is anything other than voodoo is a disservice to British Columbians or any businesses or individuals considering moving here on that basis.
References:
Not-so-hidden debts
B.C. Hydro has 27 “regulatory accounts” where it has amassed debts in the name of rate smoothing. The total amounts to $4.67-billion owing, as of June 30, 2013. The utility’s regulator has ordered Hydro to raise rates to repay those accounts, and even then it will take years to dig out from these 27 holes.
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Deferred Debt
But that deferred debt, estimated at $2.1 billion in the 2011 fiscal year, is expected to keep climbing to reach $4.7 billion by 2014, according to the latest numbers from the Ministry of Energy and Mines. By March of that year, BC Hydro will have paid off only $250 million of that amount.
Just last fall, Auditor General John Doyle expressed alarm over the massive amounts of expenses that BC Hydro has deferred to future years through a practice known as rate-regulated accounting
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$30-$40 Billion Total Liabilities
Ask yourselves if it was prudent of BC Hydro to recently borrow and spend $10 billion, presumably increasing its capacity to do business, knowing that the global economy was in disarray?
So, over the last six to eight years how much new debt has BC Hydro taken on in your name, as a citizen and owner; do you know or care? Besides the formal amount of $8 billion in new total liabilities it has added $2.2 billion of receivables from the ratepayer’s category. BC’s Auditor General reports that it looks like this category is programmed to balloon even more. These obligations do not take into account the present value of the secret IPP contracts that would probably add another $30-40 billion to total liabilities.
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