Jump to content
The Official Site of the Vancouver Canucks
Canucks Community

Standard and Poor gives B.C. highest possible rating over budget and fiscal plan


Wetcoaster

Recommended Posts

Moody's and Fitch for that matter did the same things S&P did. Rated obvious highly speculative crap AAA, only they have yet to be charged.

Trumpeting the opinions/ratings of liars and cheats doesn't really help to strengthen your argument.

Link to comment
Share on other sites

Yes I know Moody's has not been charged. They did exactly what S&P did, their time is coming.

I mentioned Fitch because they are part of the "Big 3". You mistakenly referenced DBRS as one of the Big 3 in your earlier post.

Has no effect? If you're going to invest or loan money for investment into this province are you not going to look into the credibility of the agency making the Tripe A rating? S&P is now viewed with a jaundiced eye. DBRS has more credibility than they do.

Dominion is not one of the "Big 3". The Big 3 are S&P, Moody's and Fitch. Dominion is much farther down the list. Though I would say they have more credibility than S&P. Who are still wiping egg off their face.

Link to comment
Share on other sites

VICTORIA - There was Premier Christy Clark Monday, dedicating herself to the goal of a “debt-free British Columbia,” and telling reporters that debt reduction has always been “a central value for me.”

Alas for Clark and her B.C. Liberals, the record of her time in office, reflected in the audited financial statements combined with her government’s three-year-fiscal plan, tell a radically different story.

Clark took the oath of office as premier two weeks before the March 31 end of the 2010-2011 financial year. The provincial debt, including borrowing by central government and its Crown corporations and agencies, stood at $45 billion.

Her predecessor, premier Gordon Campbell, having inherited a debt of $34 billion from the previous New Democratic Party government, had managed to slow the rate of borrowing during his second term as premier.

But after the 2008 global financial crisis, it began growing again, and Clark did nothing to slacken the pace. In her first two years, her government added $11 billion to the debt, the biggest jump in dollar terms in provincial history.

Nor did she reverse the trend with the budget and fiscal plan tabled in the legislature in February this year.

The plan called for three balanced budgets on the operational side, meaning no cause to borrow more money to fund ongoing programs like health care, education and other government services.

But Clark and her colleagues continued to budget for a huge increase in borrowing for capital projects, including the ambitious rebuilding of the BC Hydro network, the Port Mann Bridge and other transportation projects, and numerous schools, hospitals, college and university buildings, and other public works.

Altogether, the Liberal plan proposes to add $6 billion to the total provincial debt this year, $4 billion in the financial year beginning April 1, 2014 and $3 billion the year after that.

So the premier who wishes to be recognized for a commitment to make the province debt free is in fact proposing to increase the provincial debt by $13 billion over three years, having already increased it by $11 billion.

Or, to put it another way, the leader who supposedly holds debt reduction as one of her “central values” would — presuming her government were to be re-elected — preside over a plan to raise the debt to $69 billion, a better-than-50-per-cent increase over where it stood when she took office.

Give her fiscal purity, Lord — just not yet.

Clark’s debt-elimination plan, as sketched out in the Liberal election platform released Monday, relies on the government being able to tap the anticipated windfall from development of an industry to export the provincial natural gas resource in liquefied form to Asian markets.

LNG development is much needed in terms of shoring up provincial resource revenues. But there are many ifs to the scenario, well-intentioned though it is.

Even in the best-case outcome outlined by the B.C. Liberals, the revenue would not start flowing into the envisioned B.C. Prosperity Fund until 2017 at the earliest. Therefore, Clark is running this year on the promise of a windfall that won’t come to fruition until the election after this one, if then.

Nor was that the only absurdity in the platform.

She trumpeted a plan to reduce the small business tax from the current 2.5 per cent to 1.5 per cent “no later than” the 2017 financial year. That one should also be footnoted against the record.

On the eve of the last provincial election, the Liberals pledged to lower the small business tax to zero, wiping it out altogether, effective April 1, 2012.

Clark inherited that schedule when she took office in 2011 and promptly abandoned it as part of the struggle to balance the budget, leaving the rate at 2.5 per cent.

Thus on Monday she invited business leaders to celebrate the prospect that four years from now, the small business tax rate will be reduced to a level that would still be 1.5 points higher than where it should have been this time last year, if the Liberals had kept the promise they made in the last election.

Her election platform also included the promise of a “core review” of all ministries as part of an effort to contain spending, cut costs and eliminate programs and services that are deemed to be not an essential part of the core services of government.

Say, didn’t the Liberals already do one of those?

Yes, after the 2001 election. They launched a second one in all but name starting in 2008, which has to date led to the reduction of the equivalent of 6,000 full-time positions in the public service.

But the core review was part of a theme that “everything old shall be new again,” along with the commitments to cut red tape — now there’s a fresh idea! — freeze taxes and restore balanced budget legislation.

What won’t these Liberals think of next: open cabinet meetings? A waste buster website?

Joking aside, at the same time as the premier invokes the darker aspects of the NDP time in office in the 1990s, she would appear to be counting on the voters to have short memories of the Liberal record.

Link to comment
Share on other sites

Debt isn't a bad thing for governments to have. Actually, some debt is good. If interest rates are low (which they are, and for the government even more so), and you can invest the money to get a higher return (which the government can do as infrastructure projects offer a great economic return), you borrow and build.

Borrowing money to offset a structural deficit (read: to pay operating expenses), is bad.

Link to comment
Share on other sites

Debt isn't a bad thing for governments to have. Actually, some debt is good. If interest rates are low (which they are, and for the government even more so), and you can invest the money to get a higher return (which the government can do as infrastructure projects offer a great economic return), you borrow and build.

Borrowing money to offset a structural deficit (read: to pay operating expenses), is bad.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...