Vaughn Palmer: B.C. NDP, Tories both vague on tough budget questions

VICTORIA — NDP leader David Eby was asked during the recent leader’s debate how he managed to turn the $6 billion surplus he inherited from John Horgan into a $14 billion deficit in four short years.

“Please tell us Mr. Eby,“ asked moderator Shachi Kurl, “where did all that money go?”

The $20 billion black-to-red-ink turnaround in provincial finances is one of the most dramatic differences between this NDP premier and his late predecessor.

Eby didn’t want to talk about it. Instead, he pointed the finger of blame at the previous B.C. Liberal government for failing to build schools, hospitals and other public infrastructure.

“The so-called balanced budgets that the previous government delivered were balanced on the backs of British Columbians, and we will never do that,” Eby told the television audience.

Yet, Horgan balanced budgets. He built schools and hospitals. He managed program spending year by year, mostly delivering surpluses. Eby was a senior member of the Horgan cabinet. Surely, he would not suggest that Horgan did it all “on the backs of British Columbians.”

Horgan, in a posthumous memoir published last year, says one of this proudest achievements was instilling “fiscal discipline” into the ever-fractious B.C. NDP. “One of the myth-busting things that we were able to do was end the narrative that the NDP can’t manage money.”

Eby in four short years has thrown that away.

He’s also saddled the province with a deficit so large that it is hard to come up with a politically acceptable scenario for bringing the books back into balance in the short- to medium-term.

Eby hasn’t even tried. Critics have struggled with the challenge as well.

The B.C. Conservatives this week released a 71-page platform that nibbles at the deficit in the short term, while promising progress over time.

The key, they say, is for the province to grow its way out. Which is pretty much what the New Democrats say, too.

The Conservatives argue they can do a better job than the New Democrats of encouraging growth, investment and job creation. They also propose to jump-start the process with a $1,000 tax cut in income taxes, costed at $3 billion a year.

There’s other tax and regulatory relief in the Conservative plan, which the New Democrats have attacked for a range of errors and omissions.

But a governing party that broke its own promise of a $1,000 rebate after the last election — and that recently confessed to a record $1.5 billion math error (!) in its current budget — can hardly claim to have clean hands on matters of fiscal credibility.

The most contentious numbers in the Conservative fiscal plan involve the growth projections, particularly the claim that the turnaround will deliver 3.2 per cent annual growth by 2029.

“Your GDP growth projections are pretty astounding,” as one reporter put it during a media conference with Conservative Leader Lorne Doerkson. “If none of this works out, where do you cut?”

The Conservatives were predicting about one percentage point more growth than the NDP predicted, replied Doerkson.

“Frankly, I think it’s completely achievable. I’ve talked to so many industries that are just waiting for a change in government to invest in this province. I think the one point extra is absolutely doable. There is a huge opportunity for us to supercharge the economy in B.C. We’re going to do everything that we can to make that happen.”

The Conservatives may well be right that a more business-and-investor-friendly approach, coupled with tax and regulatory relief, will be an improvement on the NDP.

In a small, open economy like B.C.’s, other factors determine outcomes as well. Many of those are beyond the reach of the provincial government.

So, to go back to that pointed question above — what if none of this works out?

Doerkson did not even hint. But his platform provides an answer of sorts.

The Conservatives will appoint an independent panel of experts “to review the province’s true fiscal position and report publicly before our first budget.” They will also audit the NDP’s capital plan.

The panel will evaluate programs and match operating costs to revenues. It will make recommendations on other matters, including red tape reduction and affordability, and report progress on a quarterly basis.

Then, according to the fine print in the platform, if any target is missed, the finance minister will “say why and how it will be corrected.”

Only then would the public discover how the Conservatives intend to proceed if their plan doesn’t work out.

Still, they would likely have leeway to act given the record deficits and debt they stand to inherit from David Eby.

He’s made it easier for successors to justify cuts by putting B.C. in a much worse financial position than the one he inherited from John Horgan.