Study
| EST. READ TIME 2 MIN.New government risks B.C.’s strong fiscal position if upcoming budget ramps up spending
Will British Columbia’s New NDP Government Abandon Past Spending Discipline?
Summary
- In many respects, British Columbia can currently boast of having the soundest fiscal position of any Canadian province. While other provinces, including Ontario and Alberta, have struggled in recent years with comparatively large budget deficits and significant debt accumulation, BC recorded a $2.7 billion operating surplus last year (2016/17)—its fourth consecutive operating surplus and the largest positive fiscal balance among the provinces.
- A key reason for BC’s favourable fiscal standing today is its relative spending discipline since 2001. After accounting for inflation and population, BC’s program spending increased at an average annual rate of 0.9 percent from 2002/03 to 2016/17—the lowest rate of any province. In Alberta and Ontario, program spending grew at faster annual rates—1.3 percent and 1.8 percent, respectively.
- If BC had increased program spending at the same rate as Alberta, the province would today be spending approximately $54.5 billion instead of what it actually spent ($46.1 billion). If BC’s program spending had increased at the same rate as Ontario’s, its spending level would have been $55.0 billion—almost $9 billion higher than was in fact the case. If spending increases in BC had grown at the average rate of the Canadian provinces (excluding BC), program spending in 2016/17 would have been $56.4 billion, approximately $10 billion more than the actual figure.
- From 2001/02 to 2016/17, BC ran nine operating budget surpluses and seven budget deficits, totaling an aggregate surplus of $10 billion over the period. Under each of the alternative spending scenarios, BC’s fiscal outcomes since 2001 would have been dramatically worse.
Share
-
Charles Lammam
-
Ben Eisen
Senior Fellow, Fraser Institute
Ben Eisen is a Senior Fellow in Fiscal and Provincial Prosperity Studies and former Director of Provincial Prosperity Studies at theFraser Institute. He holds a BA from the University of Toronto and an MPP from the University of Toronto’s School of Public Policy and Governance. Prior to joining the Fraser Institute Mr. Eisen was the Director of Research and Programmes at the Atlantic Institute for Market Studies in Halifax. He also worked for the Citizens Budget Commission in New York City, and in Winnipeg as the Assistant Research Director for the Frontier Centre for Public Policy. Mr. Eisen has published influential studies on several policy topics, including intergovernmental relations, public finance, and higher education policy. He has been widely quoted in major newspapers including the National Post, Chronicle Herald, Winnipeg Free Press and Calgary Herald.… Read more Read Less… -
Milagros Palacios
Director, Addington Centre for Measurement, Fraser InstituteMilagros Palacios is the Director for the Addington Centre for Measurement at the Fraser Institute. She holds a B.S. in IndustrialEngineering from the Pontifical Catholic University of Peru and a M.Sc. in Economics from the University of Concepcion, Chile. Ms. Palacios has studied public policy involving taxation, government finances, investment, productivity, labour markets, and charitable giving, for nearly 10 years. Since joining the Institute, Ms. Palacios has authored or coauthored over 70 comprehensive research studies, 70 commentaries and four books. Her recent commentaries have appeared in major Canadian newspapers such as the National Post, Toronto Sun, Windsor Star, and Vancouver Sun.… Read more Read Less…
Related Topics
Related Articles
Can B.C.’s new finance minister bring some discipline to provincial finances?
By: Tegan Hill and Ben Eisen
B.C. government must do a 180 on fiscal policy
By: Ben Eisen
Not a ‘vibecession’—Canadian living standards are declining
By: Jake Fuss and Grady Munro