Another year, another provincial budget — but that’s where the similarities end. For the provincial Tories, it’s 2003 all over again — just like when the Williams administration was first elected, the current Tories are facing an empty bank account, public sector unions that are caught in the midst of negotiations, and there’s much less oil money in the kitty.
And that means layoffs, program cuts and, in the case of the current budget, another large deficit.
The government is saying that 935 public service jobs — including 250 vacant positions — will disappear.
The province will have only two school boards, one English, one French. There are many cuts.
This is the tough medicine that the provincial Tories were threatening last year, but which they seem to have sidestepped by promising a multiyear review of spending instead. Last year, we had so-called “prudent” growth, what then-finance minister Tom Marshall called “a reduced rate of spending growth” in the budget.
Prudent has turned out to be a big pit: instead of a $258-million current account deficit in the last fiscal year, the provincial government came in $430 million in the hole.
And still, despite the layoffs and cutbacks, the province expects to run an even larger, single-year, $564 million deficit.
That means if oil prices are at the $105 a barrel the government is forecasting, we will be over half a billion dollars more in debt 12 months from now, effectively shifting that half a billion dollars onto our kids.
But you can ask if the government has gone far enough — especially because, in 2013-14, the government will actually spend $138 million more than it did last year.
It’s clear there had to be cuts.
In fact, it’s been clear to observers for years that the Tory administration was more focused on splitting up the province’s newfound oil wealth than it was on saving any of the cash for the rainy day that is obviously here.
We warned about this three years ago after the 2010 budget: “For a government that prides itself on driving without brakes, there have to be occasional concerns that we’re using the capital we have in a headlong race towards a financial brick wall. … (The province has had) increased spending of 51 per cent in just seven years. … When, exactly, is it time to apply the fiscal brakes?”
We had the same warnings after the 2009 budget — and after the 2008 budget, when we pointed out the clear risks of having 37 per cent of revenues coming from oil. Those same warnings have come from several quarters for years.
We could keep going, but you get the point.
These woes have been a long time coming, but they have come home to roost.
Here’s a fact: it’s far easier to govern when the money is rolling in, and when the budgetary process is merely limiting the number of things you’re saying yes to — and the current government said yes to a lot.
You’re also far more popular then.
This is when governing gets difficult.
Let’s see how the government faces a different kind of reality — and what its members actually have the stomach to live with.