The vision that Premier Christy Clark is aiming for is the eventual elimination of provincial debt.
Our plan starts with the jobs plan and ends with a debt-free B.C., she said Monday, releasing the B.C. Liberals election platform in advance of yesterdays official start to the campaign for the May 14 election.
Its the basis for all the fiscal calculations, its the highlight of the platform and its written on the side of her campaign bus.
The concept is to seize the liquefied-natural-gas and oil-refinery opportunities, maximize the revenue from those projects and create a multibillion-dollar bonanza that could be used to pay down debt.
Theres an outside chance that this is achievable, but a lot of things have to go exactly right before any future finance minister claims debt has been eradicated.
The current projections are that B.C. could collect anywhere from $80 billion to $220 billion in revenue from liquefied natural gas over 20 years if the plants are finished, if contracts are signed and if the prices stipulated in the contracts hold firm.
The plan is to bank half of all that potential revenue and apply it to debt. But it looks like future governments would have to hit the brakes when it comes to piling up debt in order to reach the goal.
The Liberal plan has a rough outline of where the money might come from. But theres nothing on the need to rein in capital spending to help make it happen.
And thats one thing the B.C. Liberals arent known for. Debt has been climbing at a healthy rate year after year for 12 years. And the rate shows no sign of slowing.
B.C. had a total debt of $56 billion last year, up from $36 billion in the Liberals first year in office. Its $63 billion this year and is scheduled to climb to $69 billion in three years.
(The figures dont include the contractual obligations incurred in various outsourcing and privatization projects.)
Most of the debt was incurred through spending on infrastructure highways and bridges and schools and hospitals. And theres no expectation that demand for all those projects will slow over the next 15 years.
At the moment, it looks like the Liberals are planning to mount a diligent effort to pay down their home mortgage, without acknowledging theyre going to keep re-mortgaging to fund continual renovations.
Some observations on the rest of the plan:
- Controlling spending, balancing the budget The plan is to do a core review of all ministries, which is a re-run of a 10-year-old idea that created a lot of angst and paved the way for huge program cuts. Theyre also promising to toughen balanced-budget legislation, which will be laughed off, given that the Liberals waived the law for four years in a row.
- Tax freeze The platform promises to freeze personal income-tax rates for five years. But the budget just two months ago includes a two-point hike on that portion of income over $150,000, for two years, starting next year. The platform also promises to maintain that hike, so its a contradictory message. But by no stretch of the imagination can that be called a tax freeze.
- Spending cap The platform promises to cap government-spending increases against the rate of nominal GDP (growth). Any government-wide spending cap will sooner or later have to involve the Health Ministry. And capping health spending is a controversial prospect, as Clark found out when she broached the idea during her leadership run two years ago.
Having an extremely long-range vision is commendable. But Clarks platform leans heavily on benefits that are four to seven elections away. She cant promise much in the here and now because, as the budget made clear, there isnt any money around at the moment.
