The B.C. Liberals’ throne speech, Tuesday, pointedly paid tribute to a lot of historically marginalized groups. Lieutenant Governor Judithju Guichon recognized the Songhees First Nation, and the Esquimalt. She offered a warm welcome to new immigrants. And she or he wished a contented Lunar Year towards the Chinese, Japanese, Koreans, Vietnamese and Mongolians in the house.
Then she switched gears and did just a little trash-talking of some other historically marginalized group: Albertans. Noting that B.C.’s economy “leads Canada,” Guichon recounted the Aesopian tale of the province towards the east which had foolishly squandered its fortune. “Consider our neighbours in Alberta – a province of comparable size, as well as blessed with natural resources. Within the decades, Alberta lost its focus. They expected their resource boom never to end, failed to diversify their economy and lost control of government spending.”
For B.C., she continued, “it has not been more important to remain vigilant – we should still strive with determination, and resist the temptation to spend our way into trouble.” Within this story, the thing is, Alberta is the reckless grasshopper. And B.C. is, by contrast … Ralph Klein, I suppose.
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After many years of standing in the Western shadow of wealthy, booming, low-tax Alberta, you will find that Christy Clark’s B.C. Liberals are having a long-awaited moment under the sun. Clark herself being ranked just a week ago by the Fraser Institute because the premier with Canada’s strongest fiscal performance.
Her throne speech rightly bragged from the Liberals eliminating thousands of barriers of red tape. It promised to push for the Trans Pacific Partnership. And it struck a refreshingly muscular tone against anti-industry groups that would see the province’s mining sector shuttered. But what sounded most impressive would be that the province vowed to control spending, and, within the mould of Ralph Klein, pay off its debt in four years.
Or rather, the federal government was careful to say it would repay in four years only its “operating debt.” That means debt from program spending rather than capital spending on infrastructure. Because, in truth, B.C.’s debt shows no manifestation of shrinking.
In the Fifteen years the B.C. Liberals have reigned, net debt is continuing to grow from $25 billion (or $32 billion when Clark became premier) to surpassing $40 billion. To become fair, the province has reduced its net debt-to-GDP ratio from over 18 per cent to 16. But the throne speech also boasted of “$7 billion dollars’ worth of ongoing infrastructure projects” while promising more to come. Even through the Fraser Institute’s ranking, B.C. ranked worse on keeping spending consistent with inflation and population growth than even Ontario did – although, again, stronger GDP growth helped counteract that. B.C.’s program spending per capita has grown under Clark far slower than Alberta’s, but still faster than Saskatchewan’s or Ontario’s.
One thing the throne speech made no reference to was reducing taxes. Clark hiked corporate income taxes in 2013, to 11 percent, still lower than Alberta and Ontario, but only marginally. Anyone earning a lot more than $151,000 pays more tax in B.C., at 14.7 per cent, than in Alberta (13 percent) or Ontario (12 per cent). And also the province still hasn’t found a way to fix the additional costs of capital purchases created by deharmonizing its PST.
For the record, Alberta actually ranks better on indexes measuring employment diversification than B.C. does (Alberta GDP’s reliance on oil and gas has substantially shrunk because the ’80s). Meanwhile, Clark still seems to be banking a lot of her confidence around the promise of getting LNG exports up and running. But so far, that plan has served up only setbacks and disappointments. Hopefully that changes. But when that’s the prerequisite before B.C. starts lowering taxes and paying down its actual debt, then all that makes Clark seem even remotely like the next Ralph Klein is that there are very few other fiscally conservative premiers around to challenge her for that title.
