Wednesday, February 19, 2014
Will Christie Clark Infect British Columbia with the Alberta Disease?
When a government mired in debt and deficits allows itself to become dependent on royalties from a non-renewable resource to make up 30% of its general revenues it might just as well go for the meth pipe. It's an addiction that cannot end well.
There are unsettling indications that Christy Clark may be looking to hit that pipe herself only with British Columbia's fracked natural gas filling in for Alberta's bitumen. While Clark's government claims to have a balanced budget, that's propped up on a lot of tinkering and wishful thinking.
Clark has said the provincial government's windfall royalties from the LNG business would be used to retire British Columbia's debt. That's expected to hit about $70-billion, almost half of which has been built up during Clark's premiership.
Finance minister, Mike de Jong, let slip that the LNG royalties, if and when they appear, may be headed into the government's books as general revenue.
“This is a revenue stream that begins once the facility has been constructed and once the product begins to flow,” he said. “We don’t see that happening within the life span of this three-year fiscal plan.”
We need to face reality. Governments that use conjuring tricks to create the appearance of balanced budgets can't be trusted not to use non-renewable resource freebies to pad their current budgets in the future. That's low-hanging fruit to a government like Clark's and it's irresistible. It would be great to believe that B.C. could not follow Alberta and not get hooked on this to our long-term detriment but that's wishful thinking.