Well surprise, surprise, surprise! BC's deficit will be way more than the $495 million Gordon Campbell promised in the election!

Well what do you know - I'm a better judge of BC's failing economy and ballooning deficit than either BC Liberal Premier Gordon Campbell or Finance Minister Colin Hansen!

Not that it's much to brag about - practically the entire province could say the same!

But it's Campbell and Hansen that have to answer for their inexplicable and repeated statements during the election and afterward that BC would only have a $495 million deficit.

Were they just stupid or were they lying? You be the judge.

Hansen now says that the first time he learned that the $495 million was unachievable was June 24.

My 24 hours/Tyee column from June 2 - three weeks before - is below, with loads of evidence that there was simply no way for BC to make the deficit projection - and that there had been no way for months before that.

Here's what Hansen told the Canadian Press yesterday however:

"Hansen said he was confident up until the middle of June the province could still meet its $495 million deficit target, but that changed on June 24 when Ottawa provided updated income and corporate tax numbers.

He said Ottawa reported that British Columbia can expect personal income tax revenues that are "significantly lower. But the biggest impact, and the one that sort of took my breath away, was what was happening on the corporate income tax revenues."

The public accounts documents revealed a sharp revenue decline of $1.5 billion, amounting to an $863 million drop in personal income tax, $212 million in corporate tax and $114 million in social services tax.

"I can no longer say that I'm that optimistic," Hansen said. There are still some big challenges. We still see lots of volatility. We will have no shortages in challenges in locking down (budget) numbers."

So there you have it - the Finance Minister and the Premier of our province were gobsmacked just late last month, while the rest of us have known for months that we were in deep financial trouble.

Or is that BC Liberal fudge?

Here's my column from June 2 - you can find the links by going to the original posting on my blog or at The Tyee version.

Bill Tieleman’s 24 Hours & The Tyee Column

Tuesday June 2, 2009

B.C. financial fudge capital of the world

View Tyee article and comments here
http://thetyee.ca/Views/2009/06/02/FudgedBudgetCapital/

By Bill Tieleman

Published: June 2, 2009

I can tell you this: the deficit for 2009-2010 will be $495 million maximum.

-- Premier Gordon Campbell, April 23, 2009

The BC Liberals have a new plan to stimulate the provincial economy -- make British Columbia the "Financial Fudge Budget" capital of the world.

Finance ministers from around the globe will travel to Victoria to learn at the feet of the masters -- Premier Gordon Campbell and Finance Minister Colin Hansen -- about how to craft the slipperiest, most expensive fudge ever seen.

That's the only conclusion one can draw from the most astonishing, outrageous and massive fudging of the B.C. budget in provincial history -- and all done during an election campaign.

So while Campbell said that if re-elected, the 2009-10 budget tabled in February with a $495 million projected deficit will be "pretty much the budget that’s reintroduced", not even the premier's closest corporate allies believe him.
Trust issues

Jock Finlayson, the B.C. Business Council executive vice-president, says he would not be surprised by a $2 billion deficit -- and Finlayson sits on the province's own council of economic forecasters.

Bank of Montreal Deputy Chief Economist Douglas Porter agrees with Finlayson, saying he could "easily foresee a deficit of that magnitude."

And last year's so-called balanced budget for 2008-09 could also have a deficit, says Helmut Pastrick, chief economist for Central 1 Credit union.

Pastrick has said consistently from February on that B.C.'s deficit would be much larger than projected and most recently predicted it would be about $1.5 billion.

Bitter fudge

What all this BC Liberal fudge means for ordinary and particularly lower income British Columbians is not a sweet treat but a bitter pill to swallow as the government begins dramatically slashing public services.

For even if Campbell decides to temporarily run a much bigger deficit than he promised to deliver, it will still require massive spending cuts and/or a significant tax increase to keep the red ink from staining the BC Liberals permanently pink.

And given that Campbell introduced a 25 per cent tax reduction when he came to power in 2001 and has steadfastly maintained that such reckless cuts stimulate the economy, don't expect him to hike taxes on business or high income earners.

When previously in a jam, facing an impending shortfall in 2002, Campbell stuck to his tax cutting rhetoric even as he was forced to claw back hundreds of millions of dollars in revenue from ordinary British Columbians.

How? By increasing their B.C. Medical Services Premiums by 50 per cent, eliminating several medical services and imposing a host of onerous user fees that are still in place today.

The BC Liberals have already promised to cut $2 billion in spending over three financial years through "administrative and other savings" and "efficiencies" -- want to bet that number goes way up along with the deficit?

Downsizing battles loom

There's another big factor -- almost all public sector union contracts expire shortly after the February 2010 Olympic Games – and with B.C.'s economic disaster status at that point, expect a nasty round of bargaining as the government tries to downsize employees faster than a bobsled on pure ice.

That's one reason Campbell and Hansen hope to delay tabling a new budget in the Legislature for as long as possible -- to give themselves more "wriggle room" and more time to blame the world-wide economic crisis instead of their own inability and unwillingness to acknowledge the situation long before the election.

But will we see business groups up in arms like they were when the 1996 NDP government brought in a $355 million deficit when it had projected a balanced budget in that year's election?

Will the National Citizens Coalition again finance court challenges against government fraud?

Not a chance -- but these hypocrites should be embarrassed when their own business-funded BC Liberals' fudge make the NDP's past mistakes look like penny candy.