The Fudgsicle Cometh? (updated)

Finance Minister on ice + fudge = Fudgsicle Budget '13

History says you should not believe BC Liberal Finance Minister Mike de Jong when he stands up and delivers his budget speech in the Legislature on Feb. 19.

De Jong was the Attorney General when ex-Liberal aides Dave Basi and Bob Virk copped a plea bargain in the BC Rail corruption trial and got their $6 million legal bill paid by taxpayers after maintaining their innocence for so many years... but let’s put that aside. 

Also, put aside that he’s a BC Liberal, the ruling party that appears to be on the way out of power under the style-over-substance Premiership of Christy Clark. 

It’s just that de Jong is delivering a pre-election budget. British Columbia governments, regardless of ideology, have had serious trouble telling the truth about finances en route to election day. This is the Land of the Fudge-It Budget. This time around, will it be a Fudgsicle?

Former Junior B hockey player and current shareholder in the inactive MSA Fundamental Hockey School de Jong laced up his skates in Victoria and hit the ice at the Save-On-Foods Memorial Centre for the cameras on Feb. 18, instead of buying a new pair of shoes, the tradition among finance ministers. He donned a Victoria Royals Western Hockey League jersey and donated $1,000 afterwards to KidSport.

Turn back the clock to March 24, 1988 when Social Credit Finance Minister Mel Couvelier gave birth to the Budget Stabilization fund -- $450 million of goodness to "help us absorb fiscal shocks." 

That was the 1980s and the Socreds evidently didn’t have the best spin doctors in their corner. The media instantly branded Couvelier’s plan the “B.S. Fund." It was the best knee-slapper since Socred Agnes Kripps proposed "BOLT" (Biology on Life Today) replace the word "sex" in 1970 (during the sexual revolution). It was surpassed in June 1996 by the nicknaming of the NDP's Cabinet Policy and Communications Secretariat (CPCS) as "cupcakes." But I digress.

“Due to the boom-or-bust nature of the B.C. economy, government revenues have been difficult to predict," Couvelier said. "In years when revenues peak sharply, transfers will be made to the fund. In years of revenue shortfall, transfers will be made from the fund.” 

Vaughn Palmer weighed-in with a March 25, 1988 column in the Vancouver Sun headlined “Mel’s Mirage: the $450 million jiggle.”

The fund does not exist in the sense that it can easily be turned into cash tomorrow, the way your bank account can. At the extremes, accounts can be manipulated to present a horn of plenty to the stockholders or a deathbed scene to the taxman.Similarly, the government slants its accounts to produce certain effects.Before an election, it wants the balance sheet to look as healthy as possible.

Couvelier sat down for a 90-minute session with the Vancouver Sun’s editorial board, which produced a story on March 29, 1988 in which Couvelier admitted it was an election ploy!

Couvelier said the fund, which amounts to a promise by the government to pay itself $450 million at some point, could be used "to support social programs or lower taxes or whatever the government decides to do with it - build highways, get themselves re-elected, whatever they want. . . "When it was suggested that re- election might be the so-called Budget Stabilization Fund's primary purpose, Couvelier replied: "Okay, that deals with motive. I'm saying the fund is there to be used for a rainy day."Now, my definition of a rainy day is not an election. But that's not to say we won't have a need to spend it in an election year."

On March 28, 1995, Finance Minister Elizabeth Cull heralded a balanced budget. NDP’s Mike Harcourt resigned from the Premiership on Nov. 15, 1995 and Glen Clark won leadership of the NDP in early 1996.

Cull tabled another allegedly balanced budget on April 30, 1996, but the Legislature was dissolved before it could be passed. New Finance Minister Andrew Petter reintroduced the budget on June 26, 1996, after the NDP won re-election. The NDP claimed “Jobs Up, Taxes Down, Debt Reduced, Budget Balanced.”

A July 4, 1996 Vancouver Sun story was headlined “B.C. finance minister admits budget ‘goof."

Glen Clark's NDP government is fighting to contain a mounting controversy over allegations it misled the public by campaigning on a balanced budget that turned out to be a $235-million deficit. Clark campaigned during May boasting that the NDP had brought in a balanced budget for the 1995-96 fiscal year. 

The Province reported on March 17, 1999: “Fudge-it budget led to premier's office: The auditor-general calls actions of two finance ministers ‘inappropriate.'

Auditor-General George Morfitt criticized both Cull and Petter for “inappropriate” actions. Morfitt criticized (Elizabeth Cull) particularly for injecting "$156 million of optimism" into forecasts for how the 1995-96 fiscal year would end up, optimism even above her own staff's most optimistic forecasts. Morfitt's report shows that Cull was frequently uncomfortable with the optimistic figures that were being urged upon her, mainly through the actions of (Glen Clark)'s confidante and top aide, Tom Gunton.

Fast forward to 2009 when the BC Liberals were aiming to get Premier Gordon Campbell his three-peat so that he could soak-up all the glory as B.C.’s Olympic Premier in 2010. 

On Feb. 17, 2009, amid the Great Recession, Finance Minister Colin Hansen tabled a budget with a forecast deficit under half-a-billion dollars. After the election and after the announcement of the Harmonized Sales Tax, Hansen tabled an update. The amount of red ink more than quintupled!

The Sept. 1, 2009 headline in The Tyee said it all: "B.C. budget includes record $2.8 billion deficit, cuts, optimism." 

British Columbia will have a record deficit of $2.8 billion, according to a budget update Finance Minister Colin Hansen presented today. That's five times greater than the $495 million projected in February and insisted upon by Premier Gordon Campbell during the election campaign.Back to de Jong and 2013. 

The Liberals are trying to make it look like they’re more fiscally responsible than the 1988 Socreds, 1996 NDP and 2009 Liberals. They even hired an expert! Tim O’Neill, a former BMO economist from the Maritimes! He’s independent! Shhh, don’t pay attention to the $25,000 he’s pocketing for less than a month’s work that resulted in a 22-page report, B.C. Budget 2013: Economic & Revenue Forecasts -- Review and Assessment. Don’t dare suggest it’s just spin. Gosh, no. The government would never do that. Perish that thought!

Well, it’s 20 pages after the title page and disclaimer. The first and last pages are half each, so that’s really 19. The margins are wide and the print is big. The word count is 4,520. Hey, that’s better than $5.50 per word. Not a bad gig, eh?

The word expenditure is mentioned just once. The word expense is nowhere to be found. 

The government paid for a report on what it will be taking in, not on what it will be paying out. A report on revenue only tells half the story. 

Surprise, surprise, O’Neill has nothing really bad to say, except, perhaps the government is too bullish on natural gas. (A degree isn’t necessary to arrive at that conclusion; one need only have watched the throne speech).

“I have concluded that there are no glaring problems or inadequacies that need to be addressed," wrote O'Neill. "There is ample evidence of professional competence, analytical rigour and appropriate caution applied in the work that goes into producing the revenue projections.”

There you have it. Voters beware! 

Budget tidbit: Will any ex-convicts be on the guest list for this year’s budget speech at the Legislature in Victoria? Just wondering! Last year there was one that we know of: Jaspal Atwal. Both Bill Tieleman and Alex Tsakumis wrote about that scandal. 

UPDATE (Feb. 22): The nearly $44 billion budget did nothing, zip, nada to tame the debt! The debt goes higher: it’s $56.1 billion this year, forecast to grow to $62.7 billion next year and, by 2015, $69 billion. A make-believe scenario to tame the deficit now without anything demonstrative to address the ballooning debt only shifts the burden from today’s families to families of the future. 

How can the Liberals spend more than $16 million of your money on an advertising campaign, which includes a brief image of debt-crushed Greece at the 2-second mark in the famous dominos ad, and claim that it is being frugal and responsible with the province’s finances? Was it really necessary to give B.C. Pavilion Corporation $2.7 million to make a bid to buy the rights for the 2014 Grey Cup for B.C. Place Stadium? Certainly B.C. Lions' owner Sen. David Braley has a large enough bank account to avoid needing a taxpayer-subsidy from a government that really can't afford such discretionary spending.

The best line of de Jong's budget speech? 

"Starting today, as British Columbians travel to other parts of Canada, they will be able to say with pride, “I come from B.C. where the government doesn’t spend more money than I send it. Where the government doesn’t burden future generations with the cost of programs being delivered today.”

Comedy gold. Who writes this stuff? 

Most British Columbians do not belong to the Liberals or any political party, for that matter. They’re not worried about those "socialist hordes at the gate" once feared by Premier W.A.C. Bennett. They’re actually worried about the persistent bill collectors and impatient bankers showing up at the door. 

The budget was skimpy on details. There was no detailed list of real estate for sale, nor was there a recap of major cost-cutting. 

The budget contains tax increases targeted at anyone who uses B.C.'s medical system, smokers, corporations and the perceived wealthy, those who earn $150,000 and up. All, except the health insurance premium hike, are things the NDP would have done. You could just tell that de Jong had practiced his lines. They were repeated over and over in the media. 

“I’d prefer not to have (raised taxes), clearly the guiding principle here was to achieve balance, a whole series of decisions flow from that, some of them very difficult,” he told reporters in a pre-budget briefing. “Those making more than $150,000, we're asking them to contribute a little more.” 

The budget was the bookend to the previous week’s throne speech, which included Clark’s unicorns and rainbows vision (delusion?) of a future in which we’ll be swimming in profits from the export of liquefied natural gas (meanwhile, Russia, Arab states, China, U.S. and even Australia are ahead of B.C.). 

An indication of how the Liberals (aka the Natural Gas Party) have lost the trust of the public is that the first major poll released after the budget, by Ipsos-Reid, indicated 72% of respondents didn’t 

believe the budget would be balanced and 47% of respondents disagreed with the budget. 

Cartoonist and video satirist Dan Murphy (who the Province will someday realize was a mistake to let go) weighed in with his subtle and hilarious Budget Highlights Closed Captioned for the Truth Impaired.

While the NDP called the balanced budget “bogus," independent MLA John van Dongen used more flowery language to blow the whistle on de Jong's misconduct for dealing a bodycheck to the concept of truthful budgeting. Abbotsford South MLA Van Dongen did nothing to flatter Abbotsford West MLA Liberal de Jong with his speech, archived here. 

van Dongen

“This so-called balanced budget,” van Dongen said in the Legislature on Feb. 21, “is designed to manage and manipulate perceptions. As such, it is imaginary, a mirage, a facsimile of the real thing. The facts don't back up the perceptions being left with the public in saying that this is a balanced budget.”

“Madam Speaker, think for a moment of the apparent sleight of hand that occurred Tuesday. Did we loot the treasury as may have happened in Shakespearean days? Did we rob Peter to pay Paul? Or did we bank on selling millions of dollars in taxpayer assets and depend on reaching deeper into the pockets of families and business people as government spending on advertising itself continues to escalate?

“I've been asking questions about the spending of millions of dollars by government, missed revenue opportunities and missed investment opportunities, and my search for the most basic answers has been blocked at every turn. I probably don't have to tell you what those questions are, Madam Speaker, but I can tell you my efforts to pursue those answers have led me to a continued search for good government...

"This budget is a pre-election document that can change quickly after the votes are counted on May 14. The budget faces none of the normal scrutiny of this Legislature, which again emphasizes the need to move to a fixed fall election date to remove the obvious politicizing, regardless of political party, of election year budgets.

“I have always strongly agreed with the objective of a real balanced budget, but I do not believe it is achievable in this fiscal year based on current economic conditions and the measures presented on Tuesday by the Minister of Finance.”