B.C.'s current economic status has some serious vulnerabilities.
BC's economy is struggling, a fact that makes fiscal choices, like those embedded in a provincial budget, that much more important.
The question that needs to be answered is not whether the provincial government has a role to play in improving B.C.'s economy but how the provincial government can best use its power as both a provider of critical services and the steward of provincial resources to better position our economy and B.C. citizens for the future.
The starting point for answering this question is a recognition that B.C.'s current economic status has some serious vulnerabilities. In the short five months since his last budget was tabled, Finance Minister Mike de Jong has seen growth slow considerably, government revenue drop lower than estimated and job loss totals worsen.
On the employment front, more than 30,000 private-sector jobs have disappeared.
Those job losses have occurred in a part of the economy where growth is tied to trends in international markets, particularly exports.
The poor showing on the jobs front has also meant an exodus of citizens to other provinces. The decline in B.C.'s population has translated into lower federal transfers, which are tied to population numbers.
Even more disconcerting, the budget update shows that one of the government's major priorities – the reduction in B.C.'s debt levels – is headed in the opposite direction.
While the rise in B.C.'s debt is not a crisis – taxpayer-supported debt remains at about 18% to 19% of GDP – it raises serious questions about whether B.C. is on the right fiscal track.
From my perspective, however, the really disconcerting part of the June budget update is that the B.C. government is convinced that the answer to a slowing provincial economy is greater austerity.
In the name of achieving a fiscal balance, the finance minister is set to further squeeze the important public services and programs that are necessary building blocks to economic growth in this province.
In fact, de Jong's plan for program review and reining in already under-funded programs and services will only keep B.C. on a track to slower growth and greater hardship.
Examples of the minister's misplaced priorities abound in his latest budget. He talks about the opportunities to improve forest product exports, but he is unwilling to recognize the need for substantial new investments in B.C.'s forest resource, investments that will ensure we sustain that resource well into the future. Instead, his budget forecasts further cuts in staffing, silvicultural investments and timber inventory work.
A similar story can be found in what the province is prepared to do in post-secondary education, especially trades training and apprenticeship programs. The government is forecasting a reduction in both the number of students it will fund in the post-secondary system and the amount of money it is prepared to invest in our colleges, universities and institutes. All of this at a time when the skills shortage is getting worse and the need for post-secondary education is increasing.
On trades training and apprenticeship in particular, the picture looks nothing like the expensive advertising that has been the focus of the premier's public pronouncements on this issue. The budget for trades training and apprenticeship is dropping, just like the government's estimate for economic growth. Hardly the strategy of a government looking to grow the province, and with it, increase prosperity.
The lesson to be learned from other jurisdictions is that austerity puts at risk all the things this budget claims are its primary goals; it wants to see growing opportunities in all regions, opportunities that lead to greater skills, higher incomes and sustained prosperity.
Laudable goals indeed, but you will never reach any of them using the roadmap that the minister tabled in this budget.
It's time to take an honest look at what makes our province work and grow. If Mr. de Jong is serious about reaching those goals, he could start by acknowledging the obvious: his budget needs a tune-up now.
Without it, our economy will continue to stall.
