Finance Minister Colin Hansen answers questions from the media during the budget lockup Tuesday afternoon.
"As we promised, given the times we are in, this can best be described as a 'status quo' budget. - B.C. Finance Minister Colin Hansen, in his address to the legislature.
The description of the provincial government budget as "status quo" may be a reference to the province's track record of providing less than full transparency to British Columbians.
Mr. Hansen skipped over inconvenient aspects of government finances when he delivered his fifth and possibly final budget speech this week in the legislature. He left it up to interested British Columbians to dig out the details in tables and appendices of the government's 112-page three-year fiscal plan.
One of the most glaring oversights relates to his failure to explain what to expect from a commitment to hold annual budget increases to 2 per cent for three years.
That means 13 ministries, including those responsible for children and family development, public safety and environment, will have less to spend in 2013 than they spent last year.
Not all spending will be cut. Mr. Hansen told the legislature that the government was "maintaining the record-high levels of investment in health care and education that we set out in our last budget." Well, that depends on how you measure the level of investment.
The Health Services Ministry expects to spend $16.8-billion in 2013, a 13.3-per-cent increase over last year. With government shrinking in almost all other areas, it is not surprising that the health ministry will account for an increasing proportion of total government spending. By 2013, health-care spending is expected to eat up 42.5 per cent of the government's total budget.
However, a closer look at the numbers offers a different perspective. As a percentage of gross domestic product, health-care spending in 2013 will actually drop. A Finance Ministry table shows health-care spending as accounting for 8 per cent of the provincial economy in 2013, compared to 8.2 per cent last year.
Similarly, spending on education will be higher in 2013, albeit a modest 1.9 per cent over last year's level. But as a percentage of GDP, spending on education will drop to 4.9 per cent, from 5.5 per cent last year.
Mr. Hansen also failed to give taxpayers the straight goods on how the government will collect its revenues. Over the past decade, the Liberal government has restructured the province's tax system to shift the burden from income taxes to user fees.
B.C. has the lowest provincial personal income taxes for individuals earning up to $119,000 a year, Mr. Hansen said. The small business income-tax rate will be lowered to zero by April, 2012. Along with Alberta, B.C. has the lowest general corporate income-tax rate.
However, the introduction of the HST, which is expected to bring in $6.5-billion by 2013, transferred a significant tax burden from business to consumers. The carbon tax also resulted in higher user fees - and lower income taxes.
And then there is MSP, the medical service plan premiums. The fee is slated to increase by 6 per cent - to $116 a month for a family of two - by next Jan. 1.
With his remarks, Mr. Hansen left the impression that the government is treading water until a new premier is selected and the results of the HST referendum are in. But that does not mean it can be called a stand-pat budget.