Rob Shaw: The real story of the 2021 provincial budget may be billions in unallocated cash the NDP government can spend at will, and without oversight.
B.C.’s latest provincial budget was an tepid plan that managed to disappoint a wide variety of New Democrat supporters – from organized labour, to child care advocates, public education supporters, and social services proponents.
But it may not be a total write-off, just yet.
Buried in the details of 184 otherwise apathetic pages were several large pots of unallocated money. Pull it all together, and you have the scratch necessary to roll out several ambitious pandemic aid packages and economic recovery announcements in the months ahead.
To find the money, you have to look at the part of the budget called “contingencies,” usually reserved for rainy-day emergency spending, fighting forest fires, and lessening sudden shocks to the economy.
Here you’ll see $3.25 billion in what’s called the “Pandemic and Recovery Contingencies.” Most of it is already earmarked for small aid programs, like $100 million for the tourism sector, and $900 million for a boost to the health care system to cover things like the mass vaccination campaign.
But $1.1 billion of it is “unallocated” – meaning it’s kept in “reserve for unanticipated urgent health or recovery measures,” according to the actual budget document.
Add to that another $1 billion in general contingencies. Plus a further $1 billion in what’s called the annual “forecast allowance” that government can use to smooth out blips in the economy if certain taxes or revenue sources drop below forecasted levels.
Plug it all into the calculator and you’ve got $3.1 billion in cash just lying around begging to be used.
That’s a lot of money.
Consider the government’s marquee aid program, a small and medium sized business recovery grant, cost only $300 million last year (and the province is still having trouble giving away the money; the budget carries $195 million of that forward into the new fiscal year so it doesn’t disappear).
So, the pot of unspent cash gives the NDP government the room to launch 10 small business grant programs.
And it can do so without pesky legislature approval.
The beautiful thing about contingency funding if the government doesn’t have to go back to the legislature to pass changes to the budget when it wants to adjust money on the fly. So it’s essentially a giant bin of gold coins that Premier John Horgan can dive into like Scrooge McDuck.
Sounds like a slush fund, you say? Well, sure. No finance minister will ever call it that. But governments for many years have used contingency and forecast allowances to smooth out the edges as the year progresses, so that the fiscal plan stays on course.
“The contingencies allocation is a prudent measure to provide for unforeseen and unbudgeted costs that may arise, and to fund priority initiatives,” reads the official description in the budget.
Translation: It’s heaven for politicians. Like a jar of delicious honey for hungry bears.
It’s from this $3.1 billion that you may see the real legacy of Budget 2021/22.
How about a taste of that cash for an angry restaurant sector still reeling from a five-week extension to the circuit breaker restrictions on indoor dining?
What about a little extra to the tourism sector for helping government on its travel restriction plan by cancelling reservations from people travelling from other health authorities?
Or, think bigger: As pressure rises, perhaps it’s here where the NDP could fund a temporary sick pay program. Or bail out school districts threatening to cut band programs due to a shortfall in education funding. Or accelerate the $10-a-day child care fund to match federal dollars.
In short, the new B.C. budget may not be as unambitious as we thought when it landed with a whimper on Tuesday. We just haven’t seen the spending yet.
Rob Shaw has spent more than 13 years covering BC politics, now reporting for CHEK News and writing for The Orca. He is the co-author of the national best-selling book A Matter of Confidence, and a regular guest on CBC Radio.
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