With his latest grim financial update as a backdrop, B.C. Finance Minister Mike de Jong Wednesday laid out the elements for a storyline to carry his Liberal government into next spring’s election.
That the deficit has climbed this year by half a billion dollars looks like bad news, but it is all to the good for the Liberal narrative, which goes like this: The economy is in peril, and only the B.C. Liberals have the track record to shield the province from the dangers.
The deficit, projected last spring to be $968-million, is now expected to reach almost $1.5-billion. Mr. de Jong, however, promises to wrestle the budget back to surplus next February through fiscal discipline and prudent economic management.
The Finance Minister pointed to the province’s enviable credit rating, its relatively low debt-to-GDP ratio, and a string of restraint-minded labour settlements. A victory for the New Democratic Party next May, the Liberals say, would put all that at risk.
Mr. de Jong said Wednesday he is more confident than ever that he can balance the budget next February. In part that is because of a “fortuitous” shift in revenues to next year: The province had initially counted roughly $290-million for the sale of the province’s Little Mountain property in Vancouver. That deal now isn’t expected to close until the next budget year.
The commitment to balance the budget is a strategic contrast with the New Democrats, who promise only to balance the budget over a four-year term of government.
British Columbians haven’t been entirely sold on the Liberal economic message – in fact for months, the polls showed NDP Leader Adrian Dix ahead of Premier Christy Clark as the best leader to manage the economy.
However, a survey last week from Angus Reid Public Opinion suggests the Liberals have closed the gap. Both leaders are roughly tied on the issue of the economy, which is still the most important issue facing British Columbia.
“The Liberals want to push this message that they are the better party to manage the economy, and it is connecting a bit,” said Mario Canseco, pollster for Angus Reid. But he noted that voters don’t tend to make up their minds based on a single issue, and with the NDP still ahead in overall popular support, an economic message alone isn’t likely to put the Liberals back on top.
It is nonetheless Mr. de Jong’s preoccupation, and he said his balanced budget assignment is more challenging given the latest forecast. The fiscal update shows that since the budget was tabled last February, personal and corporate income taxes have come in $312-million higher than forecast, but coal and natural gas revenues are off by a total of $385-million. “We still have a gap to wrestle with and there is virtually no room for any kind of big-time pre-election spending extravaganza,” he told reporters.
He said he is not in favour of raising taxes but would not rule out such a measure to meet the target of a balanced budget in time for the next election. “At this stage of the budgetary process, I’m not going to rule anything out,” he said, but added that his preferred prescription calls for “discipline, to be sure.”
NDP critic Carole James said the Liberals are facing a credibility gap with the public.
“We’ve seen absolutely no discipline – what kind of discipline is there when $15-million is spent on election advertising?” she told reporters. “The only thing the Premier and the Finance Minister seem to care about is the next election. These are difficult economic times and the public deserves better.”