B.C. NDP and Conservatives get 'failing grade' for fiscal reality, says economist

Neither the NDP nor the B.C. Conservatives have a clear plan for dealing with B.C.’s record deficit as it seems they rely on economic projections that don’t reflect fiscal reality, says one economist.

Werner Antweiler, an economics professor at the UBC Sauder School of Business, said both parties need to be more transparent that there will likely be cuts or tax increases in the coming years.

“Both parties get a failing grade from me for fiscal stewardship. Those plans are fiscally unsound because they do not take fully into account that you need either heroic assumptions about economic growth to shrink the deficit, or you actually have to go and either raise revenue or cut expenditures,” said Antweiler.

“Something’s got to give here and the true, honest answer to British Columbians is that there’s going to be some pain-making adjustments.”

In their costed platform, released Sunday, the Conservatives’ promised savings through the elimination of the NDP’s CleanBC climate plan, the cancellation of contracts with highly paid consultants, and attrition of non-front line workers. They project a deficit of $10.8 billion in 2029-30.

That is despite a projected income tax cut, which will allow British Columbians to make up to $32,000 before paying any tax, and the elimination of bureaucratic red tape to allow the economy to grow by 2.5 per cent in 2027, 2.8 per cent in 2028 and 3.2 per cent in 2029.

The Conservatives expect growth to bring in $2.6 billion over three years, with cuts saving another $11.7 billion over four years, including $7 billion from the holding back of contingencies and just over $2 billion from public sector attrition.

On the other side of the ledger, the tax cut alone is projected to cost $2.9 billion annually, although one tax expert said it could cost as much as $4 billion per year. Other big promises include $350 million for seniors care and $205 million for health care.

The Conservatives project new operational spending of $1.08 billion over four years to go with their $2.9 billion tax cut, for just under $4 billion of new spending.

The NDP say the Conservative platform doesn’t include the cost for promises like the temporary removal of the PST on Canadian liquor, estimated to be $280 million, the building of a new women and children’s hospital in Surrey, and the creation of a Filipino cultural centre in Vancouver.

Adrian Dix, NDP candidate for Vancouver-Renfrew and former energy minister, accused Conservative interim leader Lorne Doerkson of hiding cuts to services like health care and wildfire fighting by saying it would create savings through the removal of money from the budget’s contingency fund.

“Contingencies mostly fund health care caseload pressures and unavoidable expenses such as wildfire fighting costs, and contingencies are critical to ensure the health care system is fully funded for the entire year,” Dix said Monday.

“Incredibly, Doerkson’s plan starts with a $1 billion cut for the remainder of this year. That means cuts this year to surgeries, to primary care clinics, and reduced services in hospitals. The cut doubles to $2 billion in the following year, meaning more health care cuts on the way.”

NDP leader and incumbent Premier David Eby’s costed plan projects over $2.6 billion in spending over three years, including $400 million on housing, $323 million on seniors care, and $315 million on child care, albeit not on the paused $10-a-day program, which is paused.

The NPD makes ambitious estimates for how much LNG and other natural resource projects are expected to bring in, projecting final investment decisions will bring $1.755 billion into the treasury over three years.

It also projects the raising of taxes on the top two income brackets and the creation of a new bracket on individuals making over $1 million will bring in just under $2 billion over three years.

On the deficit, the NDP project it will fall to just under $12 billion by 2028-29, almost the same as the Conservatives’ projected deficit of $12.3 billion for that year.

Doerkson has said the NDP makes promises it can’t keep and pointed to the last four years as proof Eby should not be given another term in government.

He said he has met with companies who are waiting for a change in government so they can invest in B.C.

“We sat around a table the other day, and I saw and recognized that there was $1.5 billion dollars sitting at that table from three different possible industries that are ready to commit, but they’re not ready to commit under this government,” said Doerkson.

“There is a huge opportunity for us to supercharge the economy in British Columbia.”

The Greens are relying on their wealth tax of five per cent for those worth $50 million or more, which leader Emily Lowan said will raise $22.2 billion in their first year, to pay for services like health care and public transit.

Hamish Telford, A UFV political scientist, said the NDP and Conservatives are talking about economic growth and not tax increases or cuts because they aren’t popular.

He said he also has a hard time taking the Green proposal seriously and pointed to the 1993 federal election when the federal Liberals under Jean Chretien spoke very little about cutting services before making a sizable cut to health transfers to provinces in the 1995 budget.

“All the parties, are trying to put the most optimistic spin on our fiscal situation, and trying to sort of present a costed platform that provides maximum benefit and minimum cost to voters.”