By John Twigg
Anyone familiar with the Vancouver Canucks hockey team will know these are tough times for the organization, both on and off the ice, but I wonder how many people realize a similar squeeze is being faced by the B.C. Liberal Party government in Victoria?
The Canucks hit a nadir on Saturday, losing badly at home to the lowly Toronto Maple Leafs in a nationally-televised game, and then last night they lost another stinker to the Minnesota team, also one of the worst in the league.
The poor performance by the Canucks on the ice is being reflected in empty seats at the rink, unheard of in years past when total sellouts were the norm in Vancouver, and it was seen on Twitter on Monday afternoon when the team had a promotion at a downtown juice stand that was giving away tickets to that night's game.
The causes of the hockey team's malaise are a combination of factors from having too many aging veterans and too many raw rookies to too many players having no-trade clauses that enable them to luxuriate in Vancouver's ambience for years on end regardless of how the team does, and it did appear that some players seemed to be playing so poorly that no team would want them in the approaching trade deadline.
In recent games it looked to me like coach Willie Desjardins was being told by management to showcase some of those weaker and/or more costly players that the team is hoping to trade away - for which the coach was excoriated by media analysts (notably in an off-camera session that inadvertantly was heard via a left-open microphone) - but the players' poor efforts seemed designed to thwart that plan too.
Off-ice the team faces rising costs from several directions such as for labour and operations and player and management salaries, and especially that the low exchange rate of the Canadian dollar makes their player salary and travel costs even more burdensome.
So the hockey franchise might like to be a buyer in the coming trade window but the squeeze from the business side suggests they can afford to be only a seller, quite possibly to little demand.
The exception would be if the team owners, the Aquilini family, decided to invest further millions into the business to buy some better players, but one wonders whether they'll be willing to do so in the current tight fiscal and economic climate.
And that difficult choice is also seen in the affairs of the B.C. government via its new budget for 2016-17.
B.C. budget "not immune" - de Jong
As this article was first being written, the Legislature was hearing a new budget speech from Finance Minister Mike de Jong, and while much was expected to be made of British Columbia's relatively strong financial and economic conditions that's only in comparison to other provinces that generally are seriously struggling.Though de Jong as expected was able to pass around a few goodies from an apparent surplus of income, the reality is that the Province still cannot afford such moves as say a major attack on poverty or say the total elimination of Medical Service Plan "premiums" still regressively charged by B.C. direct to B.C. citizens whereas most other provinces use a means-tested system through income tax.
"We are on track to meet our budgetary forecasts, but we are not immune from the challenges facing the world economy," de Jong said near the beginning of his speech, a preliminary transcript of which is available from B.C.'s Hansard House-Blues.
The inability or unwillingness of the B.C. Liberals under Premier Christy Clark to aggressively address the poverty problem was described well in a column this morning by pundit Bill Tieleman in The Tyee online news site, viewable here and a larger excerpt below.
"Today is B.C. budget day, but don't count on Clark to deliver because it's simply not her priority," he wrote, noting 20 per cent of B.C. children live in poverty, according to advocacy group First Call's analysis of Statistics Canada figures, and people with disabilities haven't had an increase in benefits since 2007 and are expected to live on just $906 a month.
In fact the government did make some moves to help low-income families, such as expanding exemptions from MSP premiums, but de Jong admitted the government was not able to do as much as was hoped.
"For British Columbia's most vulnerable citizens, the strength and flexibility of our social safety net is vital to health, happiness and even survival. That's why Budget 2016 is providing an additional $673 million over the next three years to the Ministry of Children and Family Development and the Ministry of Social Development and Social Innovation to support families and individuals most in need," said de Jong, which over three years is not a huge lift.
That was a point quickly made after his speech by NDP finance critic Carole James, who contrasted that with other more generous new spending in other areas and then adjourned debate for a more fulsome critique tomorrow afternoon.
"Budgets are all about choices," she said, claiming the new budget shows the true character of the Clark L:iberals because it gives tax breaks for the wealthy but little for families.
She noted the government is spending more on liquor store renovations than on housing.
B.C. NDP leader John Horgan also issued a caucus news release making similar criticisms, which is viewable here.
The always-useful analysis by Bill Tieleman is here
And the astute analysis of the National Post's Brian Hutchinson is at "Spendthrift but balanced B.C. budget a classic case of give-and-take" http://natpo.st/1mGndq5
It certainly is true that British Columbia's diversified economy is performing remarkably well compared with other provinces, as was noted in an op-ed piece in this morning's Vancouver Sun by Jock Finlayson and Ken Peacock of the B.C. Business Council viewable here.
"Against the backdrop of slumping commodity markets and tepid global growth British Columbia near-term economic prospects are surprisingly positive creating a largely favourable backdrop for this week's provincial budget," they wrote, citing particularly a surge in in-migration and population growth.
Of course there are many factors in the mix, such as the low C$ enabling sales of B.C. commodities even into depressed markets, and the low C$ being likely to encourage tourism into B.C. this coming summer, and heavy snow having helped the ski resorts this winter, but on the other hand the lower prices for oil and gas and the depressed demand for energy may kill B.C.'s hopes for a liquefied natural gas industry even before any plants are built - which would greatly undermine the Clark Liberals' economic and fiscal plans.
So it's far too early to celebrate B.C.'s successes even though de Jong insists the province's plans are "on track" and really there are many serious challenges still waiting to be addressed, such as homelessness and rising costs of housing and struggling small businesses.
Meanwhile there are many other strategies that could be pursued but are not for various reasons, such as allowing bulk water exports, reviving the Bank of B.C. so it can issue a new currency and help finance business growth and job creation, encouraging renewable resource industries, expanding job creation for low-skilled workers and many more good things (e.g. a new ferry crossing from YVR to Gabriola) that the budget overlooked.
I'll probably have more to say in coming days as more details become apparent.
Below are the government's news release, more of Tieleman's column and a link to an interesting perspective on budget-making in B.C. by the Victoria Times-Colonist's Les Leyne.
Government news release and Minister's quotes
Minister of Finance Michael de Jong - "We've been following a prudent plan that includes a focus on paying down our direct operating debt, which is projected to be at its lowest point since 1984-85 if we stay on course." "B.C. families know that working hard to pay off their credit card debt means they will save money on interest payments, and the same is true of government. A reduction in the operating debt means almost $500 million that would have gone to interest payments can instead be invested in priority programs for British Columbians." "With a track record of successive balanced budgets, B.C. remains in a fiscal position envied by many jurisdictions around the world. We are forecast to lead Canadian provinces in economic growth this year and are continuing to make fiscal decisions that further strengthen our economy, create jobs and make life more affordable for British Columbians." For more details on Budget 2016, visit: http://bcbudget.gov.bc.ca
Ministry of Finance NEWS RELEASE
Fiscal discipline and new investments support B.C. families, jobs and
communities
VICTORIA - British Columbia's continued fiscal discipline and steady
economic growth are providing the means for new and increased funding for
services, helping families with the cost of living, and taking new steps to
help promote home ownership, Finance Minister Michael de Jong announced
today.
Balanced Budget 2016 invests $1.6 billion in new and increased spending over
three years on core services in addition to annual 3% increases in the
health ministry budget, almost $500 million of which is funded by lower
interest costs due to the retirement of operating debt.
Government will once again balance its budget in 2015-16, and in each year
of the three-year fiscal plan. Within the balanced budget, new and increased
investments in government programs and services include:
* $3.2 billion over three years added to the Ministry of Health compared to
2015-16.
* $673 million in additional support for children, families and individuals
in need over three years, including $217 million for the Ministry of
Children and Family Development to support vulnerable youth and their
families, and $456 million for the Ministry of Social Development and
Social Innovation to support those in need and to increase monthly
disability income assistance rates.
* $143 million over three years to enhance key areas of the B.C. economy
that support jobs in communities, including the new $75-million Rural
Dividend Program to help small communities strengthen and diversify their
economies, additional support for youth trades training, building the B.C.
wood brand in India, and additional BC Transit funding.
Changes to Medical Services Plan (MSP) premiums and enhanced premium
assistance effective Jan. 1, 2017, will help lower-income families,
individuals, and seniors with the cost of living. All children will be
exempted from MSP premiums, directly benefiting about 70,000 single-parent
families. By making children free and expanding premium assistance, an
additional 335,000 people will see their premiums reduced and an additional
45,000 people will no longer pay MSP premiums at all. With these changes,
for example, a single-parent with two children would save up to $1,224 each
year, and a senior couple earning up to $51,000 may now qualify for reduced
premiums. Once the changes are implemented, nearly two million British
Columbians will pay no premiums at all.
Government is acting to help the housing market respond to high demand for
homes, which is resulting in rapidly rising prices, particularly among
single-family homes in the Lower Mainland. Budget 2016 introduces a new full
exemption from the property transfer tax on newly constructed homes
(including condominiums) priced up to $750,000. This exemption will save
purchasers up to $13,000 on a newly constructed home and is estimated to
provide approximately $75 million in property transfer tax relief for new
construction in 2016-17. The cost of this measure will be offset by adding a
third tier to the property transfer tax rate, increasing the rate to 3% from
2% on the fair market value of property above $2 million.
Proposed changes to the Property Transfer Tax Act will authorize government
to collect new information from owners when they register their property.
The government will resume collecting data that specifically identifies
foreign purchasers. Beginning this summer, individuals who purchase property
will need to disclose if they are citizens or permanent residents of Canada,
and, if they are not, their citizenship and country of residence.
Government is also investing capital funding of $355 million over the next
five years for construction and renovation of affordable housing for people
with low to moderate incomes.
A portion of the dividend derived from the government's strengthening
economy, fiscal discipline, and reduction in operating debt will be used to
establish the B.C. Prosperity Fund. Budget 2016 applies an inaugural
commitment of $100 million from the forecast 2015-16 surplus to establish
this long-term legacy intended to:
* Help eliminate the Province's debt over time.
* Invest in health care, education, transportation, family supports and
other priorities that provide future benefits to British Columbia.
* Preserve a share of today's prosperity for future generations.
Government has identified its lead priority for the B.C. Prosperity Fund as
reducing taxpayer-supported debt. Government will allocate a minimum of 50%
of each year's allocation to the fund to debt retirement, and a minimum of
25% will be saved to accumulate earnings. The remainder will be available
for core government priorities that provide long-term benefits to British
Columbia. In addition, future government surpluses including LNG revenues
will help grow the fund over time.
Budget 2016 continues to invest in new and upgraded infrastructure to
support services and jobs. Taxpayer-supported infrastructure spending will
inject $12 billion into the economy over the next three years, build new
projects, and expand and sustain existing infrastructure. This includes:
* $3.1 billion in total transportation infrastructure investment, including
highway upgrades and transit infrastructure.
* $2.9 billion for new major health-care projects and upgrades to health
facilities, including the new Centre for Mental Health and Addictions.
* $2.5 billion for post-secondary facilities, including building capacity
and helping meet the province's future workforce needs in key sectors, as
set out in the B.C. Skills for Jobs Blueprint.
* $1.7 billion to maintain, replace, renovate, expand and seismically
upgrade K-12 school facilities, including new school space to accommodate
increasing enrolment.
The surplus forecast in each year of the fiscal plan helps keep taxpayer-
supported debt affordable. By the end of 2015-16, the direct operating debt
will be reduced by $2.2 billion since government resumed balancing its
budget. Under the current fiscal plan, with continued fiscal discipline,
there will be an opportunity for B.C. to be free of operating debt as early
as 2020 - the first time in 45 years the Province would not be carrying the
burden of operating debt.
The independent British Columbia Economic Forecast Council is projecting
provincial real GDP growth to be 2.7% in 2016, 2.6% in 2017, and an average
of 2.4% over 2018-20. Government's economic growth forecast remains prudent
relative to the Economic Forecast....
When Do the Needy Get to Enjoy 'Bright Spot' BC?
We'll find out with today's budget. My forecast? More crumbs for the struggling.
''Let them eat cake!'' -- Attributed to French Queen Marie Antoinette, 1755-93, in response to the poor not having bread
British Columbia has the best economy in
Canada -- something that BC Liberal Premier Christy Clark is constantly
boasting about, calling it the country's only ''bright spot.''And that's great news, but when do people in need start seeing any of the benefits?
Today is B.C. budget day, but don't count on Clark to deliver because it's simply not her priority.
B.C. has Canada's leading economy, yet 20 per cent of our children live in poverty, according to advocacy group First Call's analysis of Statistics Canada figures.
People with disabilities haven't had an increase in benefits since 2007 and are expected to live on just $906 a month, including food and shelter costs for a single person. Try that in Metro Vancouver.
Les Leyne re BC budget
http://www.timescolonist.com/opinion/columnists/les-leyne-past-budgets-show-how-ideas-can-fail-1.2173243
"Life
has to be more meaningful for people,” finance minister Dave Barrett
observed at the outset of his first budget speech in 1973.
Injecting “meaning” into people’s lives is a pretty ambitious goal for a government budget. Most finance ministers just try to cover as many bases as they can and hope for the best. Barrett was premier as well, of course, so he had a lot more leeway in writing the speech.
As the annual public-accounts geekfest known as the budget lockup gets underway this morning, it’s a good time to review budgets of years gone by. Some of them give clues to how bright ideas can go sideways, or turn to gold.
- See more at: http://www.timescolonist.com/opinion/columnists/les-leyne-past-budgets-show-how-ideas-can-fail-1.2173243#sthash.aIBzR1B7.dpuf
Injecting “meaning” into people’s lives is a pretty ambitious goal for a government budget. Most finance ministers just try to cover as many bases as they can and hope for the best. Barrett was premier as well, of course, so he had a lot more leeway in writing the speech.
As the annual public-accounts geekfest known as the budget lockup gets underway this morning, it’s a good time to review budgets of years gone by. Some of them give clues to how bright ideas can go sideways, or turn to gold.
- See more at: http://www.timescolonist.com/opinion/columnists/les-leyne-past-budgets-show-how-ideas-can-fail-1.2173243#sthash.aIBzR1B7.dpuf
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