He wore the same black dress shoes to deliver this year’s budget speech as he did last year, and Finance Minister Mike de Jong told pretty much the same story for B.C. The good news is that the government is adhering to its fiscal prudence mantra. The bad news: there’s no sign the province’s economy will pick up significant momentum any time soon.
Hitching its trailer to a Canadian winner, de Jong’s speech rolled out Team Canada world junior hockey analogies. It pointed to drive, discipline and effective execution of a game plan as keys to victory.
But for B.C.’s economy, there are significant hurdles to long-term victory on many fronts and threats from the “unforeseen.”
Not long ago, for example, the Liberals had liquefied natural gas (LNG) pencilled in for $1 trillion in economic activity and 100,000 new jobs.
The jobs outlook remains. Their arrival, however, has been relegated to an opaque “over time” estimate; the $1 trillion, meanwhile, has taken a significant marketplace writedown. Oil’s deep dive might have returned much discretionary spending to B.C. consumers, but it has also seriously eroded LNG’s global price prospects and drained the investment capital pool for LNG export plant proponents.
The BC Liberal government deserves applause for assisting on de Jong’s hat trick: a third consecutive balanced budget. Extending its $10 million mining flow-through share tax credit to the end of 2015 and increasing the mines industry budget are also prudent decisions, as are tax credits for digital media, animation and visual effects.
But B.C.’s overall debt will continue to rise: to $70.4 billion by 2017-18 from $64.7 billion in 2014-15 when de Jong’s previous budget was delivered.
To return to the finance minister’s hockey analogy, the province will have to go extremely hard to the net in the next year and have more breaks like last week’s federal LNG capital cost tax relief announcement go its way in the global arena if it hopes to maintain B.C.’s balanced-budget win streak and the standard of living the province’s citizens have come to expect.
