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BC  

Will prudent spending end?

Will B.C.'s record of prudent spending over the past two decades come to an end?

That's a question being pondered by the Fraser Institute, an independent think tank, as the NDP government prepares to release its first full budget since assuming power, next week.

An institute study indicates consecutive governments during the past 15 years have increased spending, on average, 3.5 per cent annually.

That was the lowest of any province in Canada. During that period, the next lowest annual spending increase was Quebec's at 4.1 per cent, while Alberta had the highest at 6.0 per cent.

“Early indications point to the new government abandoning the prudent choices of the past that have led, in part, to the relatively strong fiscal position B.C. enjoys today,” said Charles Lammam, director of fiscal studies at the Fraser Institute.

B.C. has produced nine balanced budgets since 2001, and is the only province to show four consecutive balanced budgets from 2013 to last year.

The study shows if B.C. had increased spending at the same rate as Alberta (6.0 per cent), the province would have achieved only two balanced budgets in the last 15 years. It also indicates last year's $2.7 billion surplus would have been a $5.6 billion deficit.

“It’s no accident that B.C.’s finances are currently in better shape than other provinces – it’s the result of relatively sound management of government spending over the long term,” Lammam said.

He says the NDP signalled a move away from what he called prudent spending during its fall fiscal update, calling for program spending to increase 6.6 per cent.

That increase, he says, didn't include big-ticket spending promised in the election campaign, such as subsidized daycare.

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