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Mortgaging BC, One Deal at a Time

Sweetheart pacts, deferred expenses, and little time to debate the budget? The taxpayer deserves more.

Dermod Travis 25 Jan

Dermod Travis is the executive director of IntegrityBC.

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Parties need to be transparent about what they're giving away. Key image via Shutterstock.

If the B.C. government is ever on the hunt for a new slogan, perhaps "spending our children's inheritance" would be fitting. 

Since 2001, British Columbians have been witness to the sale of key parts of B.C.'s infrastructure, transfers of its wealth to private interests and sweetheart deals for industries that can afford well-connected lobbyists.

There's the scandalous: the sale of BC Rail; the infamous: the run of rivers; and the it-would-almost-be-funny-if-it-weren't-true: the incorporation of Jumbo, B.C. a community with a council of three and not a single resident.

Sometimes the government gets called out on these deals by one of its own before they're inked, as they were in November over a proposed tax break for Pacific Western Brewing, a major donor to the BC Liberal party. 

After some initial hue and cry, cabinet minister Rich Coleman tinkered with it sufficiently to pick up the support of the NDP who called the politics of the deal "messy," but the outcome "sound." 

But how many voters caught news of Coleman's $10-million stocking stuffer for B.C.'s horse racing industry? Announced five days before Christmas, it would have been an easy miss. A little Yuletide cheer from Coleman and the BC Lottery Corporation.

Yet, for a government on its way to spending $44 billion in 2013, a few million here for microbreweries, a few million there for horse racing is relatively inconsequential in the grand scheme of public finances. 

Governments have bigger fish to fry. 

Hocus pocus accounting

Within days of next month's provincial budget, B.C.'s auditor-general is expected to release his report on the Pacific Carbon Trust, a Crown corporation. Scuttlebutt says it's not pretty and in all likelihood will be met with a well-orchestrated spontaneous show of criticism from friends of the government.

Another area of worry: the increasing use of deferral accounts by the government and its agencies to push the fiscal peanut down the road to another day.

In 2011, BC Hydro reported $2.2 billion in deferred expenses, a sum forecast to hit $5 billion by 2017. It's money that the utility has spent, but for now can choose not to report as though they've actually spent it. 

The auditor-general calls it "creating the illusion of profitability where there is none."

Others might describe it as hocus pocus accounting, but that doesn't make the dollars any less real.

Some of these sweetheart deals, stocking stuffers and deferrals may be in the province's long-term interest, but in the near total absence of any meaningful legislative oversight it's difficult to know.

Legislative oversight is fundamental to good government. And with less-and-less of it, the government does more-and-more by decree. B.C. isn't well-served by that.

In 2012, the B.C. Legislature sat for 47 days. Among its numerous legislative duties: to debate and approve a $44-billion budget.

Forty-seven days is simply insufficient to do that and everything else well.

What's owed to taxpayers

The B.C. Legislature has committees on paper, but not so much in practice. Regardless of who wakes up in government on May 15, there must be a renewed commitment to the idea that committees can play a crucial role in legislative oversight through rigorous debate on government policy.

And with what may only be a 19 day session before the election, it will fall heavily on political pundits to scour next month's budget for any sign of "fudge it" numbers.

But there should be another litmus test: will it be sufficiently transparent on the true costs of future financial commitments that the government has already made in the name of future governments?

Because fiscal policy doesn't just have an impact on the here and now; it can also have an impact on taxpayers 30 years down the road, as the $53.1 billion in deals BC Hydro has signed with private energy producers prove. 

It's why the BC Liberals, the NDP and other parties have a duty to spell out how their campaign promises can be met in the context of B.C.'s overall fiscal reality.

B.C. taxpayers are all too familiar with that legendary post-election hokey-pokey that political parties have danced at one time or another.

It's the jig known as "public finances are even worse than we had imagined and we'll have to postpone some of those electoral goodies that we promised you." 

After the HST debacle, it's one dance voters could do without.  [Tyee]

Read more: Politics

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