Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • Report looks at captured nature of BC’s Oil and Gas Commission August 6, 2019
    From an early stage, BC’s Oil and Gas Commission bore the hallmarks of a captured regulator. The very industry that the Commission was formed to regulate had a significant hand in its creation and, too often, the interests of the industry it regulates take precedence over the public interest. This report looks at the evolution […]
    Canadian Centre for Policy Alternatives
  • Correcting the Record July 26, 2019
    Earlier this week Kris Sims and Franco Terrazzano of the Canadian Taxpayers Federation wrote an opinion piece that was published in the Calgary Sun, Edmonton Sun, Winnipeg Sun, Ottawa Sun and Toronto Sun. The opinion piece makes several false claims and connections regarding the Corporate Mapping Project (CMP), which we would like to correct. The […]
    Canadian Centre for Policy Alternatives
  • Rental Wage in Canada July 18, 2019
    Our new report maps rental affordability in neighbourhoods across Canada by calculating the “rental wage,” which is the hourly wage needed to afford an average apartment without spending more than 30% of one’s earnings.  Across all of Canada, the average wage needed to afford a two-bedroom apartment is $22.40/h, or $20.20/h for an average one […]
    Canadian Centre for Policy Alternatives
  • Towards Justice: Tackling Indigenous Child Poverty in Canada July 9, 2019
    CCPA senior economist David Macdonald co-authored a new report, Towards Justice: Tackling Indigenous Child Poverty in Canada­—released by Upstream Institute in partnership with the Assembly of First Nations (AFN) and the Canadian Centre for Policy Alternatives (CCPA)—tracks child poverty rates using Census 2006, the 2011 National Household Survey and Census 2016. The report is available for […]
    Canadian Centre for Policy Alternatives
  • Fossil-Power Top 50 launched July 3, 2019
    What do Suncor, Encana, the Royal Bank of Canada, the Fraser Institute and 46 other companies and organizations have in common? They are among the entities that make up the most influential fossil fuel industry players in Canada. Today, the Corporate Mapping Project (CMP) is drawing attention to these powerful corporations and organizations with the […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers


Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

BC’s super-fudge-it budget

Under the “we told you so” category, I am filing the BC public accounts for 2009/10. The province closed the year with a deficit of $1.8 billion. As Will McMartin comments in The Tyee:

… B.C.’s public accounts for the fiscal year 2009/2010 conclusively prove that the pre-election fiscal plan foisted on British Columbians by Premier Gordon Campbell and his BC Liberals on Feb 17, 2009 was the worst — the most egregious, the most deceptive — “Fudge-it Budget” in provincial history.

The public accounts show that the Campbell Liberals inflated revenues in Victoria’s main operating account, the Consolidated Revenue Fund (CRF), by a stunning $2.558 billion — yes, Billion — with taxation receipts alone overstated by $2.1 billion.

Even under the broader GAAP (generally accepted accounting principles) presentation, the Campbell government exaggerated last year’s expected revenues by a whopping $1.3 billion.

The result: a gargantuan shortfall of $1.779 billion for fiscal 2009/10 — nearly four-times higher than Campbell’s oft-repeated, pre-election pledge of a deficit no bigger than $495 million.

Back in early 2009 before the Budget was released, we crunched some scenarios of the fiscal outlook, noting many concerns about the state of the provincial economy moving forward. We started with the rosy estimates of the Ministry of Finance, which bases its projections on the average private sector forecast coming from the MoF’s Economic Forecast Council (a long time ago, we used to be part of this autere group but got cut after the Liberals came to power in 2001).

Noting that the EFC figures were too rosy, we then modeled the impact of two recession scenarios. Preliminary GDP data for 2009 are still not available, but we used different estimates of GDP to project revenues, and in our pessimistic scenario, this resulted an estimated deficit of $1.6 billion.

So we were off a bit but not by much – and since the economics department over here is Iglika, unlike the army of number-crunchers over at the MoF, I think we did alarmingly well. In contrast, the 2009 Budget projected a deficit of only $495 million. At the time we commented:

… those deficits may be much larger before this is all over. Spending pressures for social assistance could rise much more than currently forecast. A challenge is in interpreting the government’s revenue forecasts. In years past, tax revenues have been grossly understated leading to large “surprise” surpluses at the end of the fiscal year compared to budget time. This year those revenue projections look to be more reasonable, although it will be interesting to see what the final tallies for 2008/09 will be to get a more accurate baseline (we will not know until summer). That said, given the recession, the budget projects an increase in some tax revenues predicated on growing personal income of 1.7% and growing consumer expenditures of 1.9% in 2009. This seems unlikely, and so we could easily see bigger deficits before this is all over. Added to this is the fact that there are no forecast allowances in this year’s budget, because that would make the deficits look larger (it was only OK to make surpluses look smaller).

Enjoy and share:


Comment from Erin Weir
Time: July 12, 2010, 1:02 pm

Under the “we told you so” category . . .

It’s a big category today.

Comment from Marc Lee
Time: July 12, 2010, 1:26 pm

We’ve said it before: Tomorrow’s conventional wisdom, today.

Write a comment

Related articles