I told this story in every town I visited on the campaign trail last year – so often that I almost feel sorry for those reporters who heard it every day. It’s about growing up in suburban Burnaby in a family of six, squeezed into a three-bedroom home with a teacher dad and a stay-at-home mom. They couldn’t afford everything we wanted, but when they died, they left us with no debt – no unpaid loans, no mortgage on the family home. My dad even prepaid his funeral expenses.
They were special to us, but not unique for a generation that understood the value of living within one’s means. Governments have the same responsibility.
Controlling spending builds the foundation to grow our economy and create jobs. Growth means we can afford services and infrastructure for citizens in the future. The alternative is to spend, borrow, spiral into decline and repeat.
In British Columbia on Tuesday, Finance Minister Mike de Jong tabled our government’s second consecutive balanced budget. That’s good news, but all too rare across Canada these days. Each government has unique pressures, but broadly speaking, we face the same set of challenges: a fragile global recovery, stagnant revenues, cherished institutions that cost money. B.C. has learned some things that I hope have value for other jurisdictions.
Public-sector wages constitute 57 per cent of our province’s $44-billion annual budget, so it’s important to reach affordable agreements. Our workers and their unions have understood our tough times and shown real leadership. Working together, we have been able to live up to the principle that we do not raise taxes or go deeper into debt to pay for operating costs.
In my three years as Premier, we’ve ensured that any modest wage increases have been paid for by the savings that workers and their unions helped identify. Last fall, we established a new mandate: Workers will now receive an additional dividend for economic growth under longer-term agreements. That’s a direct financial stake for workers in growing the economy and certainty for taxpayers, along with uninterrupted service.
Leadership matters, so our senior leaders have set an example. Across the core and broader public service, senior executive salaries have been frozen for four years. In 2012, we instituted a 10-per-cent salary cut for any new hires to those ranks. By law, my cabinet colleagues and I must balance our budgets; failure to do so results in our own salaries being cut by a fifth.
Affordable wages are particularly important in health care, where $7 out of every $10 goes to salaries, so we’ve chosen to innovate. We’ve implemented ideas like lean-design health care and “pay for performance” in hospitals. Now, as we increase health investments by $2.5-billion over the next three years, we can target that money for more doctors, nurses and better outcomes – not more back offices and paperwork. B.C. currently delivers the second-lowest-cost health care in Canada while providing the best patient outcomes for health concerns such as cancer and cardiac care.
These principles are applied across the public service – reducing overhead, sharing administration, bulk purchasing. And we are going one step further with the first core review of government in a decade, to identify what could be done better, more efficiently or maybe not at all.
Finally, it may not be colourful enough to make the news, but the most important part is simply having the discipline every day to say no to growing the size of government. It’s hard to do. Many of the calls for new spending are for programs that are close to our hearts. But the reward for holding the line is a triple-A credit rating and that saves billions on interest costs we’d otherwise be sending to the bankers.
Balancing the budget is the first step to paying down our debt. You cannot eliminate long-term debt if you don’t first stop overspending every year.
Imagine what our children can achieve with the freedom to make their own decisions when it’s their turn to lead, free from the burden of the decisions that our generation made but couldn’t pay for.
It’s simple to imagine and hard to achieve. Our parents knew this in their bones. They knew it was unfair to leave us their debts – and our children deserve the same.
Christy Clark is Premier of British Columbia.