Why B.C.’s NDP government is being watched so closely

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NDP conventions in B.C. have a history of being caustic, divisive affairs marked by self-defeating rancour and public bloodletting.

This is why the one that concluded this past weekend in Victoria was noteworthy: The mood was almost ebullient, the happy byproduct of being in power. It also helps that the New Democratic Party is being led by someone, in John Horgan, who is more pragmatist than idealist, and consequently has the party in a far more enviable position than it has been in some time.

It is not lost on Mr. Horgan that his is the only NDP government in the country, now that its counterpart in Alberta was almost wiped from the political map in that province in the previous election. The United Conservative Party’s Jason Kenney did a masterful job of painting Rachel Notley’s government as reckless spendthrifts and debt enablers driving the province to financial ruin.

It will be a reputation that will shadow Alberta’s NDP for some time. B.C.’s New Democrats have seen this movie themselves. After a decade in power in the 1990s, they were driven out of office by the Liberals in 2001, thanks, in large part, to a relentless campaign focusing on the NDP’s fiscal incompetency and “socialist” ways. The Liberals used that legacy against their opponents in every subsequent election campaign.

This is why the state of the province’s books are such a concern for this NDP government. Economic management is the party’s great albatross – across the country.

There is little question that the BC NDP inherited a strong economy and a solid ledger sheet (including five straight balanced budgets) from the Liberals when it took power in 2017. The NDP has, in turn, tabled two balanced budgets and is now drafting its third, which will be out early next year. The question is, will it be balanced? Or maybe it’s better phrased this way: Can the NDP afford it not to be?

That’s ammunition it does not want to give the Liberals, assuming the NDP’s minority government lasts until the next scheduled election in two years time. Still, it won’t be easy.

Mr. Horgan’s government has run into some pretty strong fiscal headwinds that are already challenging the current budget. Finance Minister Carole James has had to dip into contingency funds to meet quarterly targets and will also have to raid the budget’s forecast allowance account to ensure a small surplus at the end of it all.

Revenues are down in some key sectors, including real estate, a cash cow for the previous Liberal regime. Forestry has taken a massive hit, stifling provincial royalty revenues. The province’s auto insurer, ICBC, continues to be a financial sinkhole. The government is in the midst of negotiations with the habitually challenging B.C. Teachers’ Federation, which wants far more than what the NDP has available to offer. (Every time the NDP forms government in B.C., the BCTF thinks it should be rewarded with a rich contract because it supports the party at the polls.)

The NDP is entering the most critical part of its mandate. It would be easy to get blown off course and allow pressure tactics from various interest groups to derail its fiscal plan. If the New Democrats allow that to happen, they will likely be one and done as a government.

The BC Liberals will make the NDP pay for budget deficits and the irresponsible deals that caused them.

There are some in the government who believe times have changed and the public is not as concerned about deficits as it once was. Proof in point: the federal Liberals, who have not shown any interest in balancing the books. There is seemingly a double standard for certain political parties and what they can and cannot get away with.

Nonetheless, there are New Democratic parties across the country watching what their counterpart in B.C. does – watching to see if it has the discipline it takes to shed the millstone that is the distinction the NDP has earned (unfairly in many cases) across the country for not being good when it comes to handling money and the economy more generally.

Mr. Horgan is aware of this knock and is determined not to fall victim to it. That is why in facing the many challenges it does, this NDP government in B.C. is unlikely to mimic previous ones.

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