VICTORIA, B.C. – B.C. Premier Gordon Campbell once staked his political career on slaying budget deficits, but the premier and his Liberal caucus will return to the legislature unexpectedly Monday to turf their much-vaunted balanced-budget law.
Campbell, who has often said he can’t stomach deficits, has been forced to admit British Columbia can’t escape the worldwide economic meltdown.
With a provincial election set for May, the Liberals have chosen red ink over reduced spending, and will amend their own balanced-budget law.
That will allow them to bring in a deficit when they release the provincial budget Feb. 17, and set the stage for provincial election where the economy promises to be a major issue.
“Over the last few weeks, we’ve been forced to confront the most difficult decisions that I’ve ever had to confront in my over two decades of public life,” Campbell said after announcing more than a week ago that the province will see at least two years of deficit spending.
Until then, he and Finance Minister Colin Hansen had been adamant that British Columbia would avoid the budge.
Last November, as the economic gloom spread from the United States around the world, Finance Minister Colin Hansen forecast a $450-million budget surplus.
Last week, Statistics Canada said British Columbia lost 68,000 full-time jobs in January, most of them in manufacturing and construction. While there were 33,000 more part-time jobs, it left the province with a net loss of 26,000 jobs.
Now, the government is set to amend its Balanced Budget and Ministerial Accountability Act, the 2001 law forbidding government from forecasting a deficit budget in a fiscal year.
The legislative calendar was hastily rearranged to allow debate on the amendment and the throne speech slated for Feb. 9 was rescheduled to Feb. 16.
The Opposition New Democrats say the Liberals have little choice but run a deficit, but are promising to pose tough questions about what they say is the government’s lengthy denial of the real economic problems facing the province.
“I think they got carried away with their own rhetoric,” said New Democrat finance critic Bruce Ralston.
It wasn’t until late January that Campbell and Hansen started to signal that British Columbia was facing economic trouble, he said.
“The finance minister refuses to face facts,” Ralston said.
“He said he only figured out two weeks ago that he wasn’t going to be able to balance the budget. These are people who’ve got very fixed ideas about what should happen and they don’t want to be distracted by the facts.”
University of Victoria political scientist Dennis Pilon said Campbell built his political reputation on fighting deficits and cutting taxes, but his decision to run a deficit rather than cut government programs likely won’t deeply wound him or his government.
“He’s built his career on being Mr. Balanced Budget, Mr. Tax Cutter, and now it appears he’s going to do neither,” he said.
“In terms of messaging, I’m not sure that this is going to hurt quite as much as some critics think, because everyone’s suffering.”
The deficit budget could damage Campbell if voters believe it was his government’s policies that put the province into the red, Pilon said, but British Columbia is not alone.
“The feds are doing it. They’re doing it in the United States. In that sense the public has been somewhat inoculated against it,” Pilon said.
