Economy
British Columbia’s finances go from bad to worse during Eby’s first full year
From the Fraser Institute
By Tegan Hill and Grady Munro
You might be able to justify higher spending if it improved programs and services for British Columbians—but it hasn’t. In fact, despite substantial increases in spending in recent years, the province’s health-care wait times have increased and student test scores have declined.
The recent move by BC United to suspend its campaign, essentially clearing the way for a two-party race in this fall’s provincial election, made headlines across British Columbia. But another recent event, which failed to garner much media attention, included some jaw-dropping numbers that will impact provincial finances for years to come.
Last week, the Eby government recently released its year-end report for the 2023/24 fiscal year—this government’s first full year in office. Unfortunately for British Columbians, provincial finances went from bad to worse as the government ran a larger-than-projected budget deficit and accumulated significant debt.
First, let’s take a closer look at the government’s budget—David Eby’s first official budget as premier—which projected a $4.2 billion operating deficit for the 2023/24 fiscal year (the government expected to spend $81.2 billion while only bringing in $77.7 billion in total revenues). For context, in its last budget the Horgan government had also planned to run a $4.2 billion deficit in 2023/24, but expected to take in $7.5 billion less in revenues. Put differently, the Eby government could have ran a budget surplus if it stuck to Horgan’s spending plan. Instead, the Eby government chose to spend away that $7.5 billion.
Given that per-person (inflation-adjusted) program spending was already at its highest level since 1965 (the earliest year of available data) under the Horgan government in 2021 (even excluding COVID-related spending), that’s a massive influx of new spending.
Now, the year-end report shows that the Eby government increased spending even further—$3.5 billion more than its original plan in the 2023 budget. Overall, it ran a $5.0 billion operating deficit in 2023/24, despite once again taking in more revenues ($1.9 billion) than it had originally planned. Again, the government chose to spend away every single dollar of extra revenue, and then some.
And the eye-popping deficit is only part of the picture as longer-term spending on things such as schools, highways and bridges, isn’t included. After accounting for long-term spending on capital projects, the B.C. government accumulated $11.3 billion in net debt (total debt minus financial assets) in a single year from 2022/23 to 2023/24. Government debt must ultimately be financed by taxpayers who spent $3.3 billion in debt interest payments in 2023/24. That’s money no longer available for programs such as health care or education.
According to the Eby government, “with a slower world economy and a growing population, we cannot afford to have a deficit of services. When we provide the services and support people need to have a good life, it makes our economy stronger and more resilient.”
You might be able to justify higher spending if it improved programs and services for British Columbians—but it hasn’t. In fact, despite substantial increases in spending in recent years, the province’s health-care wait times have increased and student test scores have declined. Put differently, according to key indicators, B.C.’s performance on health care and education—the two largest areas of government spending—have worsened despite higher spending.
Higher spending also hasn’t paid off for the B.C. economy, which is stagnating. The province’s per-person GDP, a broad measure of living standards, is expected to be lower this year than in 2018. And the Eby government expects negative growth in per-person GDP this fiscal year.
Unfortunately for British Columbians, the latest year-end report on B.C.’s finances shows the Eby government took a bad fiscal situation and made it worse with higher spending and an even larger budget deficit. The next government, whoever that may be, must deal will this fiscal mess.
Authors:
From the Canadian Taxpayers Federation
Author: Franco Terrazzano
At the 2024 Cannes Film Festival in France, bureaucrats spent $9,930 on “umbrella stand coordinator services”
The Trudeau government blew more than $2.7 million on high-profile film and music festivals around the world, where they made taxpayer cash rain throwing expensive parties.
All that spending occurred for events that took place during a 16-month period, between January 2023 and May 2024, according to government records obtained by the Canadian Taxpayers Federation.
Bureaucrats attended the Oscars, the Cannes Film Festival in France, the Berlinale film festival in Germany, and the South by Southwest music and film festivals in Austin, Texas and Australia – all on the taxpayer dime.
“Government bureaucrats spent $175,000 a month partying it up at international film and music festivals,” said Franco Terrazzano, CTF Federal Director. “In what world does it make sense for bureaucrats to blow millions of taxpayer dollars on festivals when the government is more than a trillion dollars in debt and record numbers of Canadians are lining up at food banks?”
During South by Southwest festivals, bureaucrats spent $35,000 on plant and furniture rentals for a “Canada House” event, as well as $5,000 on “DJ services” and “animation services.”
An additional $15,000 was spent on a “social media champion” for the Canada House. Food and drink catering costs for a reception, as well as an “opening party” came to $11,700.
The 2023 South by Southwest festival in Australia also had a “Canada House,” with costs totalling at least $97,000. Bureaucrats also expensed $17,000 for an “event coordinator.”
At the 2024 Cannes Film Festival in France, bureaucrats spent $9,930 on “umbrella stand coordinator services.”
During the Berlinale festival, the rental fee for a “Canada Pavilion” came to $74,000.
Additional expenses at the festivals included professional photographers and hundreds of thousands of dollars spent on decoration services.
“Maybe government bureaucrats should figure out how to do basic things, like answering taxpayers’ phone calls, before trying to DJ international parties,” Terrazzano said. “Taxpayers are giving this international film festival party junket two big thumbs down.”
The spending happened at the ministries of Global Affairs Canada and Canadian Heritage, with money also spent by the National Film Board.
All told, the cost to taxpayers came in at $2,798,719, according to the records. The events all occurred during a 16-month period. That means the average spending on the festivals was $174,919 per month.
The government has already earmarked spending for future film and music festivals, with bureaucrats indicating the “plan is to continue to support Canadian talent at these world-class markets,” according to the records.
The details were released in response to an order paper question submitted by Conservative MP Michelle Rempel Garner (Calgary Nose Hill).
From the Fraser Institute
By Julio Mejía and Elmira Aliakbari
The resulting reduction in global GHG emissions would amount to a mere four-tenths of one per cent (i.e. 0.004 per cent) with virtually no impact on the climate or any detectable environmental, health or safety benefits.
Last year, when the Trudeau government said it would cap greenhouse gas emissions (GHG) from the oil and gas sector at 35 to 38 per cent below 2019 levels by 2030, it claimed the cap will not affect oil and gas production.
But a report by Deloitte, a leading audit and consulting firm, found that the cap (which would go into effect in 2026) will in fact curtail production, destroy jobs and cost the Canadian economy billions of dollars. Under Trudeau’s cap, Canada must curtail oil production by 626,000 barrels per day by 2030 or by approximately 10.0 per cent of the expected production—and curtail gas production by approximately 12.0 per cent.
According to the report’s estimates, Alberta will be hit hardest, with 3.6 per cent less investment, almost 70,000 fewer jobs, and a 4.5 per cent decrease in the province’s economic output (i.e. GDP) by 2040. Ontario will lose more than 15,000 jobs and $2.3 billion from its economy by 2040. And Quebec will lose more than 3,000 jobs and $0.4 billion from its economy during the same period.
Overall, the whole country will experience an economic loss equivalent to 1.0 per cent of GDP, translating into lower wages, the loss of nearly 113,000 jobs and a 1.3 per cent reduction in government tax revenues. Canada’s real GDP growth in 2023 was a paltry 1.1 per cent, so a 1 per cent reduction would be a significant economic loss.
Deloitte’s findings echo previous studies on the effects of Ottawa’s cap. According to a recent economic analysis by the Conference Board of Canada, the cap could reduce Canada’s GDP by up to $1 trillion between 2030 and 2040, eliminate up to 151,000 jobs by 2030, reduce federal government revenue by up to $151 billion between 2030 and 2040, and reduce Alberta government revenue by up to $127 billion over the same period.
Similarly, another recent study published by the Fraser Institute found that an emissions cap on the oil and gas sector would inevitably reduce production and exports, leading to at least $45 billion in lost economic activity in 2030 alone, accompanied by a substantial drop in government revenue.
Crucially, the huge economic cost to Canadians will come without any discernable environmental benefits. Even if Canada were to entirely shut down its oil and gas sector by 2030, thus eliminating all GHG emissions from the sector, the resulting reduction in global GHG emissions would amount to a mere four-tenths of one per cent (i.e. 0.004 per cent) with virtually no impact on the climate or any detectable environmental, health or safety benefits.
Given the sustained demand for fossil fuels, constraining oil and gas production and exports in Canada would merely shift production to other regions, potentially to countries with lower environmental and human rights standards such as Iran, Russia and Venezuela.
The Trudeau government’s proposed GHG cap will severely damage Canada’s economy for virtually no environmental benefit. The government should scrap the cap and prioritize the economic wellbeing of Canadians over policies that only bring pain with no gain.
Authors:
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