The British Columbia NDP government’s pre-election budget has alarmed critics as it projects a staggering deficit and unprecedented debt accumulation solely fueled by high government spending.
The budget, unveiled by Finance Minister Katrine Conroy Thursday, reveals a daunting deficit of $7.9 billion projected for the 2024/2025 fiscal year.
This unprecedented deficit forecast marks a historic milestone for British Columbia, coinciding with the provincial government’s heightened spending targeted at easing the burden of soaring cost of living for residents.
Some are saying that it was strategically timed ahead of the next provincial election which is set to take place this October.
Conroy explained the higher spending by pointing out the urgent need to tackle problems like housing, healthcare, and the environment, which have worsened due to increasing inflation rates.
The budget allocates funds towards initiatives like a home-flipping tax, a one-year boost on the B.C. Family Benefit, an electricity credit for consumers, and additional spending to stimulate the rental housing market.
Yet, critics worry about whether such extensive spending can be maintained. The budget proposes a strategy where anticipated deficits are slated to reduce gradually from $7.9 billion in 2024/25 to $6.3 billion in 2026/27. However, the province’s debt indicators are forecasted to rise substantially, although they are projected to stay within what the government considers “affordable” boundaries.
“The Ministry of Debt Interest is now the fourth biggest in the province,” said Canadian Taxpayers Federation British Columbia director Carson Binda.
“We’re sending billions of dollars a year to Toronto bond fund managers instead of keeping that money in the pockets of hardworking taxpayers, who desperately need tax relief.”
One of the most concerning numbers in the budget is the expected net debt, which covers long-term investments like roads and schools. By 2026/27, British Columbia’s net debt is predicted to soar to $128.8 billion, showing a massive 227% increase since fiscal restraint ended in 2016/17.
Inflation-adjusted program spending per person reached a record high in 2022/23, standing at $14,275 per person, a stark $3,739 increase compared to 2016/17 figures.
This increase in spending is worrying, especially since it’s not just due to the COVID-19 pandemic. The Fraser Institute reports that even without pandemic-related costs, British Columbia’s adjusted program spending per person reached record highs in 2022/23, indicating a broader pattern of rising government spending.
