What a difference a couple of weeks make. Two weeks ago the minister of finance stated he was determined to balance B.C.’s budget by 2013 as required by the law. This week, armed with a new financial update and weakening prospects for B.C.’s economy, the minister stated he will still try to do that, but isn’t willing to take a “damn the torpedoes” approach to balancing B.C.’s books.
If the finance minister is going to miss the legislated timeline to balance B.C.’s books by 2013, then, for the third time since 2009, the B.C. Liberals will have to introduce legislation next spring to amend the balanced budget law to give themselves the legal authority to run deficits for a few more years.
The new D-day for balancing B.C.’s books will be chosen for political reasons, not fiscal ones. And, given the state of the global economy, it’s just as likely the government of the day will be unable to balance the books if a date is chosen within the next decade. Which would mean that that government will have to introduce legislation to, once again, delay the date the books need to be balanced.
Let me state this as clearly as I can: balanced budget legislation is an ideological failure and must be abandoned all together. Rather than amending the legislation to reset the date for balancing the books we should repeal the balanced budget legislation in its entirety. Every jurisdiction that has implemented balanced budget legislation hasn’t obeyed the letter of this law and balanced the books when the economy tanked — they simply changed the law to allow themselves to operate under a deficit, just as BC has done. This practice negates the whole point of having balanced budget legislation.
More importantly, constantly amending the balanced budget legislation centres the debate on the relative importance of balancing the books in any given year. Instead we should focus on whether our taxation system generates sufficient revenue to meet the expectations citizens have of their government so that government can manage those expectations within their means — over the entire budget cycle.
Bob Simpson is the Independent MLA for Cariboo North.