The B.C. government is demanding schools, hospitals and other independent agencies open their books for a government-led cost-cutting effort as it wrestles with a ballooning multibillion-dollar deficit.
In a Throne Speech that points to some harsh fiscal measures in next week's provincial budget, the B.C. government acknowledged "some will be asked to make significant adjustments."
"The fiscal cupboard is bare and currently hangs on a wall of deficit spending," the Liberal government's Throne Speech stated. Speaking later to reporters, Premier Gordon Campbell said his obligation to taxpayers overrides the independence of health authorities, boards of education or other Crown agencies.
"When the government is the single shareholder, we have responsibilities to our taxpayers and we intend to exercise our responsibilities."
Opposition Leader Carole James panned the Throne Speech as a collection of recycled - and previously broken - promises. She said the plan to review spending by Crown corporations and others is a sign that service cuts are in the works.
"Cuts are coming, and unfortunately it's the people who are least able to afford them who will pay," she told reporters.
The reviews were announced in the Speech from the Throne, which marks the start of the first session of the legislature since the May provincial election.
The hands-off approach usually afforded independent government agencies "should not prevent government from maximizing its public investments in independent, regulated authorities," said the speech, read by Lieutenant-Governor Steven Point.
"Where Crown agencies or functions delivered by them can be more cost-effectively administered directly by line ministries, they will be," Mr. Point read.
"Crown entities will systematically be reviewed to maximize public effectiveness."
The province just axed the Crown corporation Tourism BC, and is reviewing the independent, publicly funded agencies that provide ferry and public transit services: BC Ferries and TransLink.
It's not the first time the Liberal government has reviewed its Crown agencies. In 2002, a "core review" led to the semi-privatization of BC Ferries. At the time, the Campbell government said moving to a business model would reduce political interference.
The speech also offered a lengthy defence of the government's unexpected announcement last month that it will harmonize its sales tax with the federal goods and services tax.
"As difficult and rapid as this decision was, it was critical to our economic future," Mr. Point read.
The federal government has offered the province $1.6-billion as an inducement to blend the provincial sales tax with the GST starting next July. The money will help pay for public services at a time when revenues are collapsing, the government has said.
Mr. Campbell maintained yesterday that he did not mislead the public during the election campaign on the HST. During the campaign, the B.C. Liberals said they were not contemplating a harmonized tax. "The HST wasn't on my mind in the election," Mr. Campbell said Tuesday.
The Premier said it wasn't until after the election that his government realized how quickly its revenues were collapsing. In the Throne Speech, the government argued it cannot afford to pass up the federal cash.
A backlash has been growing since the change was announced last month. The agencies that run long-term care homes, for example, say the change will increase their costs by more than $10-million, resulting in service cuts.
And while Mr. Campbell restated his commitment to increase health-care spending by 20 per cent over the next three years, the health authorities are warning it is not enough to forestall health-care cuts.
The Fraser Health Authority, facing a $160-million deficit, plans a 10- to 15-per-cent reduction in elective operations in fiscal 2009-2010, spokeswoman Joan Marshall said Tuesday. Those cuts include a planned slowdown during the 2010 Olympics and will affect more than 8,000 operations.
Other health authorities that are now facing a financial review have also announced layoffs and reduced services in the face of the shortfall.
One of the first orders of business in this legislative session will be another amendment to the province's balanced budget law, this time to permit four years of deficits. The speech promised to protect only the "indispensable" health and education services while resisting overspending.
"We will not throw up our hands, throw in the towel and borrow our way into oblivion," Mr. Point read.
With a report from Wendy Stueck in VancouverReport Typo/Error