Despite falling resource revenues and rising debt, B.C.’s provincial government is continuing to budget billions for major projects, a scenario the opposition maintains is leading to a hidden debt load.
“The government has locked British Columbian taxpayers into nearly $100-billion in contractual obligations, many of which we know very little about,” New Democrat finance critic Mike Farnworth said Tuesday “British Columbians deserve to know how the government came to rack up a hidden debt that eclipses the provincial debt, and what it plans to do to fix this.”
Mr. Farnworth was referring to Tuesday’s release of the 2012-2013 Public Accounts, which report government spending and income for the year ending March 31, 2013.
B.C. ended the year with a deficit of $1.1-billion, reflecting revenues that were $1.1-billion lower than forecast in last year’s budget, primarily as a result of falling prices and demand for resources including natural gas.
Spending controls brought in last year as revenues fell helped government reduce spending by $668-million, provincial Finance Minister Mike de Jong said.
Total provincial debt increased by $5.6-billion to $55.8-billion, reflecting investment in capital projects including roads and refurbished hydro plants.
Premier Christy Clark campaigned on the slogan “Debt-free B.C.” in her winning run in the May election – but reaching that goal depends heavily on the emerging liquified natural gas sector. Under Ms. Clark’s LNG plan, three plants would be up and running by 2020.
Partnerships that include major companies – including Shell, Apache and Chevron – have proposed LNG plants on the west coast of B.C. that would produce liquefied natural gas to be shipped to overseas markets.
On Tuesday, the government issued a press release noting Woodfibre Natural Gas Limited had filed another export application for an LNG project with the National Energy Board. In a statement, Ms. Clark said the application reflects the potential that LNG has to deliver jobs and prosperity to B.C. and that the players are moving quickly to get a foothold in the emerging sector.
“It’s right around the corner,” the Premier said. “If they want to be part of this opportunity, it’s urgent that companies are in the game now.”
Energy analysts have said it is unlikely that all of the proposed multibillion-dollar B.C. projects will proceed.
Last month, the government said it was on track to hit a surplus budget for the 2013-2014 fiscal year, but that it would have to make $30-million worth of cuts to hit its projected surplus of $153-million in 2013-2014.