Common Sense Canadian
 

Under Liberal govt, BC is drowning in hidden debt

Posted June 28, 2016 by Rafe Mair in Politics
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Under Liberal govt, BC is drowning in hidden debt

I always read the comments to this journal, the Tyee, Norm Farrell’s In-Sights and others and I often add comments of my own. What I’ve been interested to learn is what possible defence Liberal supporters can make for this wretched government we’ve had since 2001.

It might be argued that these comments are mostly from left wingers. I have no idea about that but I must say that if I were in politics and defending the government, these are the kind of places where I would do it because this is where those critical readers are. A better explanation for the lack of a defence of the Clark government in these papers is that there is none!

In reading comments I came up with the following one in the Tyee last week, which was the only one I could find where there was any kind of a defence one really felt compelled to deal with:

Fact is, right now, BC is highly successful given solid policies of the Christy Clark BC Liberals government. Best economy of ANY government in Canada; Lowest unemployment rate; balanced funding for healthcare and education and other programs.

BC is doing really well.

The myth of “balanced” budgets

Let’s deal with the latter point first – “balanced funding for healthcare and education and other programs.” I am going to assume that the writer means “balanced budget”.

Many far more expert than I have written on the fraud that is implicit in the words “balanced budget” as they relate to this Government in particular. Obviously, the writer believes that “balanced budgets”, Liberal style, have provided funding for healthcare and education. Indeed, a proper balanced budget does demonstrate the true state of fiscal affairs throughout the government and may point to that conclusion.

These Liberal “balanced budgets” do no such thing and aren’t even close to being balanced.

It’s the old maxim “garbage in, garbage out”. If you only include the good things, or perhaps it’s better put the other way – if you leave out the bad bits, then you’re going to be able to look as if you balanced it.

Hydro drowning in private power debt

One of the fiscal catastrophes of this government is BC Hydro, which now owes $76 billion due to their pork barrelling policies in giving the making of power to their friends, Independent Power Producers (or IPPs) in the private sector, on a highly contemptible and scarcely subtle sweetheart deal. Below is the record in graphic form of what the Campbell/Clark government has forced BC Hydro to pay IPPs, their high donating supporters, for private power (in 2016 dollars).

Graphic courtesy of Norm Farrell

Graphic courtesy of Norman Farrell/In-Sights

In 2015 – get this now – BC Hydro paid these generous donors to the Liberal Party, $672 million more than market value for their power! As you pay your higher hydro rates, remember the money is going to these bastards! This money is owed by you, hence by the government, yet it doesn’t show up in their budget! Poof, it’s gonzo!

This is like you taking your mortgage payments or your bank loan or car loan out of your own personal budget and patting yourself on the back for great fiscal acumen.

Well, try that on your banker and see what he says about your balanced budget.

The premier, brash as brass, and the finance minister, looking embarrassed, tell everyone that the budget is balanced so all is well with the world. The fact is we are in terrible financial shape and the government is lying through its teeth.

True debt has skyrocketed under Liberals

Here are the real statistics as as the Liberals claim to be delivering “balanced” budgets while the province’s financial obligations increased $72 billion in the last six years, more than the provincial debt in the BC’s first 135 years. Liberal claims of balanced budget rely on accounting fashioned to mislead voters. It results in absurd situations such as: keeping BC Hydro’s huge debts off the government’s books while including “dividends” from BC Hydro to the government as revenue, although the utility has to borrow the money shifted into provincial accounts; and dividing expenditures into ordinary (operating) and extraordinary (capital) expense, while counting only the former as a budgetary expense.

Below is the real picture, in 2016 dollars.

Graphic courtesy of Norman Farrell/In-Sights

Graphic courtesy of Norman Farrell/In-Sights

BC is certainly amongst the lowest in unemployment in Canada and that is obviously a good thing. It’s just not as great as we would like to believe.

In many ways, to compare BC to other parts of Canada with far different economies makes as much sense as comparing it to South American countries. Unless the issues in other provinces are relatively the same, it’s comparing apples and oranges. There are similarities, of course, such as the value of the Canadian dollar, but here again, that affects different regions in different ways.

Probably the main reason B.C. is doing so much better comparatively than the rest of Canada is because its economy isn’t as vulnerable to changes in the price of oil. Plummeting oil prices have led to drastic job losses in Alberta, Saskatchewan, and parts of Atlantic Canada. In other words, comparisons are odious and produce a misleading picture which makes BC look better than it is.

More to life than employment numbers

The Liberals can’t claim credit for something that is beyond their control and is merely a comparison with other, very different economies. For the individual, life is not only the job but what that employment brings with it. The desired result is not just having a job but having security with it. Will the job bring the opportunity to own a home? How long, if ever, will it take to be able to afford that home? Will I be able to afford transportation to and from that job? What are the schools like? Is there a bad crime situation? Is the government in sound shape, sufficient to provide the social amenities today’s society has come to expect?

BC Premier Christy Clark touring Petronas' operations in Malaysia (BC Govt / Flickr CC licence)

BC Premier Christy Clark touring Petronas’ operations in Malaysia (BC Govt / Flickr CC licence)

We hardly need reminding of the housing situation and how until we got into an election year, Premier Clark acted as if there was nothing to worry about. She has dithered, taking her laissez-faire advice from rich condo builders, until this has become a full-blown crisis she is unable to deal with.

At the very same time that Christy Clark is losing money in government and in BC Hydro and taking useless trips to China and Singapore, she would have you believe that education, health, welfare, mental illness, services to children in need, services to women in need, shelter for the less well-off are in superb shape – combined with a superior education system which is fully funded. As the Duke of Wellington said to the man who greeted him with “Mr. Robinson, I believe”, “If you believe that, you’ll believe anything”. 

Not a pretty picture

The fact is the government is a fiscal mess. Its largest asset, BC Hydro, is technically bankrupt, facing an $9+ billion bill for Site C. The Liberals have a dismal record in their Health Ministry and a worse one in Children and Families, an Education Ministry in disarray, a disgraceful history of neglect of the mentally ill and on the sad saga goes.

I’m afraid to tell my friends, if any, on the Liberal party side that they have no argument and, in my barrister days, I would have been delighted to take a jury trial against them as defendants.

But that’s not the end of the matter. They have also turned out to be a corrupt government from top to bottom, starting with the premier. Her airline expenses are totally unacceptable. The fact she uses, at your expense, a permanent television cameraman for her photo-ops tells the story when you think about it. Her method of selling herself to the highest bidder in collecting money for the Liberal party is outrageous and invites insidious comparisons, scarcely respectful of her office.

LNG takes the cake

Rafe- NDP's LNG reversal is a game-changer in BC electionGod knows I could go on but I close by reminding everyone of the ongoing LNG fiasco. Warned by the experts years ago there would be no market, this spinner of fanciful tales has piled on one empty promise after another. She’s 0 for 22 in the LNG plants promised, has ignored all environmental concerns, used patently biased Environmental Assessment processes, not even bothered with one when she didn’t feel like it, made a firm deal with  a jungle-burning, tax-evading bully-boy owner of Woodfibre LNG proposed for Squamish, and continues her fanciful, First Class, tax paid sales junkets to non-existing markets and, in spite of even worsening market conditions, plans even more.

The only possible excuse for Christy Clark’s catastrophic leadership is that lack of education and experience has left her having no idea of what she should do.

And as Porkypine observed, “Pogo, the confidence of ignorance has not died out.”

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About the Author

Rafe Mair

Rafe Mair, LL.B, LL.D (Hon) a B.C. MLA 1975 to 1981, was Minister of Environment from late 1978 through 1979. In 1981 he left politics for Talk Radio becoming recognized as one of B.C.'s pre-eminent journalists. An avid fly fisherman, he took a special interest in Atlantic salmon farms and private power projects as environmental calamities and became a powerful voice in opposition to them. Rafe is the co-founder of The Common Sense Canadian and writes a regular blog at rafeonline.com.

31 Comments


  1.  
    BILL

    BC politics taught me many years ago that; “Right is you get away with it and wrong is when your caught.”




  2.  
    Frank

    The joke is in the idea that the NDP will do a better job. Perhaps the best message to the Liberals and their spendthrift ways is a loss at the election. The solution to government overspending is of course a bigger government. Makes sense to the left-wing.




    •  
      Gonzo

      I gotta love all these people who cast aspersions on the NDP yet don’t explain how or why the NDP would be so horrible for this province. How can you predict what the NDP will do when they don’t hold power in this province?




  3.  
    Greg Carr

    Used to love listening to you on CKNW Rafe and you did a great job in helping shut down the Charlottetown Accord. I will be voting BC Liberal May 9 and if you want to vote NDP or Green go ahead they will lose. Your still upset that Gordon Gibson, the man who went broke, didn’t take over the BC Liberals when Vandervomit destroyed the Socreds.




  4.  
    Ted Fullerton

    Pogo also said “We has met the enemy and they is us.” In our current context it means we can no longer sit on the sidelines, otherwise we ARE the enemy through omission. We must get involved AT election time and more importantly BETWEEN elections. i have asked my local MLA, Doug Routly, why the NDP are not going on the attack more frequently and more forcefully. No answer yet.




  5.  
    Keith Porteous

    Not sure why this piece didn’t touch on B.C. Ferries, a company that is “privatized” in name only, where the government owns 100% of the shares, and has the replacement of vessels and infrastructure costing billion$ going forward.




    •  
      Hal

      One of the tactics employed by “business-friendly” governments who are opposed to Crown Corporations and prefer every service privatized is because it reduces the size and cost of government on paper- so they claim. The tactic is to bankrupt a crown corp. first. This “proves” to them that business can run things cheaper and better and in their minds justifies privatization. Whether it improves service to the voter is beside the point and irrelevant to them as those impacts only reveal themselves years later. What is important to them is that it supports the ideology. Higher costs and poorer service usually results but that happens some years later when it is too late to reconsider the action or even hold the offending government accountable.




  6.  
    Ian McDonald

    Government is a creature of the people. We are lazy in our luxury people. Wake up! We hire them, we can fire them.




  7.  
    woodstover

    Horrible state of provincial gov’t affairs! The NDP (which I don’t support yet) has the cat half in the bag just because of the blatant underhandedness, lies, corruption, etc that Crispy and her gang practice daily. Why are they so quiet?? If they want to lead, they need to act like it.




  8.  
    Hal

    Rafe wrote a similar piece before the last election laying out the fiscal incompetence (or dishonesty, take your pick. I expected that Rafe’s information quoting Erik Andersen might have been pictured in graphic comparisons in NDP campaign ads and raised at every political forum during the campaign. Nothing happened. Maybe average voters really are intellectually lazy but what could it have hurt. It might just have given the troops something to stir them up.




    •  
      lary waldman

      The people that run NDP Campaigns, are they there because they are exceptional, or are they there because well they support the NDP. I wonder if that makes a difference?




  9.  
    Ian McDonald

    Are we not yet tired of this ancient hubris. 1776 came before 1867. We share the same history. How about we adopt a Constitutional Republic similar to if not identical to the Constitution of the United States and their Bill of Rights?

    How about we make a Declaration of Independence? Do you know of anything better?




  10.  
    Ian McDonald

    It is implicit that the granter [electorate] retains superiority
    and that the recipient [elected official and his/her agents] admits to a limited [or inferior] [and not a prerogative] status
    within the relationship.




  11.  
    Greg

    I struggle with the ‘facts’ presented. BC Hydro is paying over market rate to IPPS? What defines ‘market rate’ to come up with that figure? Historic low costs of cheap power built by dams from the 60s? Look around the world at the cost of power generation at sites today and you will find them in line with prices paid to IPPs. That’s the cost to construct and maintain facilities today?

    What about the fact the BC maintains the best credit rating? Or does that FACT not count?

    At the end of the day one can always find faults in any government. But if you are going to call them liars then you’d better make your you are accurate in what you are spouting




    •  
      Damien Gillis

      Market rate is the typical cost of buying or selling power to our neighbours in Alberta and Washington State. That rate has consistently hovered around $30-35 MWh in recent years, though it can drop even lower, particular during the Spring freshet period, when the region is literally awash in power. This is, in a sad coincidence, the most abundant period for “run of river” private power, adding insult to injury. This article and its numbers are, sadly, quite correct.




    •  
      Hal

      Debt is never a problem for supporters of right-wing governments. They feed the public illusions that it can always be paid off by future generation. Forest will be forever, resources are forever and LNG will pay off out debt. All you need is to keep the faith. Credit ratings are a manufactured economic pacifier.




    •  
      JasonS

      Greg please feel free to hold the Neo-Liberal party of BC’s “facts” to account.
      100,000 jobs , 100 billion prosperity fund , families first , the most open and transparent government , debt free BC ? If you don’t understand how “market rates” are calculated why do you question the “facts” that have been presented ?
      I assume you are paid not to understand the “facts”.




  12.  
    G. Barry Stewart

    “A better explanation for the lack of a defence of the Clark government in these papers is that there is none!”

    On occasion, I’ve invited BC Lib backers to take part in the discussions at Norm Farrell’s site. I suspect Norm edits out any disrespectful posts — but there should be SOME well-spoken BC Lib fans out there, who would like to respectfully refute Norm’s graphs and charts. No one shows up, though… leading me to conclude that they simply have no defence to place before Judge Farrell.




    •  
      Damien Gillis

      I somehow doubt that’s the case – Norm would likely prefer to let the comment stand and offer his rebuttal. I can tell you for sure that we at the Common Sense Canadian would happily welcome such commentary from anyone who took issue with the data.




  13.  
    Evil Eye

    There is even more massive debt to follow.

    The now $5 billion Massey tunnel replacement bridge is just one of the many “vanity” projects that are being done without a whiff of public scrutiny. All on a back of an envelope.

    TransLink has imploded under years of Government imposed SkyTrain rapid transit, which is not just costly to build and operate, it is obsolete.

    The Ministry of Transportation is headed by an idiot and sadly, is the reason he is Minister of Transportation.

    Even the TransLink file can’t be trusted with Stone, so Factbender is perverting the regional transit cause.

    The school system is collapsing under the weight of government edicts, which many schools will be rendered obsolete because they will be in ghost communities of foreign owned homes, many of the vacant. Massive influx of laundered Asian monies will soon render metro Vancouver unlivable for most and the need for massive bridges and light metro will wane because many residents will just move away.

    Vancouver will become a playground for the very rich and a ghost town of hopeless drug addiction for the very poor.

    BC Hydro has been raped repeatedly by the grifters in power that there is little left to rape.

    The criminals that are the BC Liberals are pure gangsters who the idiot public have left to destroy this province, yet the media remains mute, as if they fear liquidation, in the old soviet style if they dare utter the truth.

    The media vilified the NDP for a sundeck; a hunting knife and Fast Ferries; the Liberals had a leader caught drunk driving in Hawaii; sold the BCR to a Liberal bag man and Campbell’s mock p-3, the Canada line was $1 billion or more over budget!

    Where have been the likes of Good, Palmer, Baldry and Smythe? They all took their 30 pieces of silver and shilled for this odorous government.

    It is those completely unquestioning, devoted drudges, the right wingers, on whom, more than even the land developers, used car salesmen and drug dealers that the stability of the BC Liberal Party depends.

    Where is the NDP?

    Nowhere.

    Dead.

    A myth, like airstrip one.

    Is Horgan an invention by the media to hide the fact that there is no official opposition?

    God help us.




    •  
      Allison Jean Munn Barber

      Well said; but you left out the total rape of ICBC. I have watched Horgan on Cable Access, and he is smart, erudite, and I think has the makings of a great leader. I watched Dix interviewed by Palmer the other night, and for the first time, I had a bit of respect for him. The system is to blame. Firstly because there is far too much money to be made by being in ‘power’, and secondly because there are no checks and balances. Clark did an end run around the BCUC rendering it useless (and costly). The NEB is no better. i am looking forward to the NDP Platform, which I would hope includes a total re-vamp of the way we are governed, and a strong system of checks and balances put in place so that this kind of dictatorship can never be replicated.




      •  

        Allison – I gave it a lot of thought and decided that ICBC needs specialt treatment. Not exactly a resource. it should not be part of BC’s resource based assessment.

        It is long overdue for a good look, however.




        •  
          Allison Jean Munn Barber

          Rafe, I believe that ICBC ought to either be run as a public insurance company, or done away with and the market step in. I’ve never understood the reasoning for it, other than a way for government to make huge amounts of money and buy real estate with it. I think a strong regulator is better than a Crown Corp. But we all know how strong regulators are in BC.




          •  
            Hal

            Allison, a few of us remember when it was all private. ICBC was intended to provide better and complete coverage for all drivers on the road and insurance at a cheaper rate. It did that. Then governments saw it as a cash cow for road improvements and such.




          •  
            Lorri Maley-Bell

            The list just keeps growing the more I read and listen…BC Hydro, BC Ferries, ICBC, BCR, BCUC, BC Ministry of Energy & Mines Failing Report Card and Bennett’s failure to resign as promised, BC Minister of Transportation failure to resign as needed, MSP antiquated and needs eliminating, Corporate and Elite payoffs disguised as party donations, vacant foreign owned homes and loop holes avoiding taxes owed, School Systems collasping as Private Schools receive a larger piece of pie, breaking of treaty 8….did I leave anything out? Oh yeah…my favorite personal spin on why the hell can’t I have a hyphenated name on my medical health card…more stupid legislation written by Liberal idiots. There’s so much to fix….where the hell do we start and why would the NDP even want to try to attempt it?




  14.  
    Salal

    Ms. Clark is living in her own little world. Her corporate sponsors keep her dream alive. I sincerely hope her long list of failures is not rewarded with another four year term. Premier material she is not.




  15.  
    isvan

    Well Raif until the msm report this you are preaching to us.




  16.  
    L Clemens

    Thank you Rafe! It is such a relief to read some thoughtful reality checks. We already knew this, didn’t we? Maybe some of us? Not an “I told you so” BC people but just try to look past Christy’s & the BC Liberals’ words & superficial responses; dig deeper, pay attention to all the areas where they are doing / destroying / off-course / ignoring / avoiding everything they can in trying to scavenge money wherever and however. Then take in all the facts Rafe points out, add in the real costs of what is included and excluded in budgeting and you have to see their misrepresentations a little more clearly and the truth that BC’s cupboards are bare. Thank you for this article Rafe, if only it would wake some people up.
    It is not only an ignorant neo-lib economic policy damaging everything but the reality that there is no money




    •  
      L Clemens

      Note: As Rafe pointed out, balanced funding of Ministries (like the health and education examples mentioned) does not exist when you take into account all the resources that are needed and are not funded. “Balanced budget” is meaningless when necessities for life are left out of the budget.





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