28-3.
It’s all I could think about while I read some of the media’s commentary around the BC Government’s 2018-19 fiscal performance.
Left-leaning pundits and columnists rushed to praise the NDP for not completely squandering the multi-billion dollar surpluses left by the BC Liberals. They took potshots at more prudent analyses of BC’s fiscal position, and claimed the NDP had exorcised all doubts about their ability to manage a provincial economy.
I kept thinking about 28-3.
NFL fans know what I’m talking about. On February 5, 2017, in Super Bowl 51, the Atlanta Falcons jumped out to a 28-3 lead over the New England Patriots with 2:08 left in the third quarter. The game, for all intents and purposes, was over. The Falcons were cruising to the franchise’s first-ever championship.
28-3 Falcons with just 17 minutes to play. This thing was over.
And then it wasn’t. The Patriots, of course, came back and won 34-28. The Falcons, instead of reveling in championship glory, are now considered the greatest chokers of all time.
The NDP are well on the way to choking BC’s economy.
Last year’s $1.7 billion surplus came about only because the NDP jacked taxes by $6 billion. This is no great accomplishment, sadly. Taxes take a while to suppress the economy, and there are already warning signs on the horizon.
First, Gross Domestic Product (GDP) growth in 2018-19 was 2.4 per cent, a strong showing. Finance Minister Carole James has built her 2019-20 budget on a similar 2.4 per cent GDP growth rate.
But given the forestry crisis, the real estate slowdown, gas price spikes, and some worrisome retail numbers, ICBA believes growth will likely be in the range of 1.8 to 2.0 per cent. This immediately cuts the amount of money James has to spend and puts her fiscal plan on shaky ground.
Further, that means less revenue from sales tax, property transfer taxes, fuel taxes (when prices go up, consumption usually goes down) and resource royalties. Again, less money to spend.
In this next budget, James will also lose three months’ worth of the Medical Services Premium/Employers Health tax double dip. Right now, the government is collecting hundreds of millions of dollars more than it should be, as James forces individuals to keep paying MSP, even as job creators are paying the new EHT. That starts to vanish in this budget cycle, meaning less money to spend.
It’s not ICBA or the BC Liberals or the Fraser Institute who are predicting a 30% decline in housing starts over the next few years – it’s the NDP Government’s own numbers. Anecdotally, we are hearing from many members and municipal contacts that building permit applications are beginning to slow. Another worrisome sign for the economy.
Then there is the unnecessary overspending on capital projects like the new Pattullo Bridge, Highway 1 expansion from Kamloops to Alberta, and the Broadway subway. While all those projects are vital to the BC economy, the NDP are doing them in the most expensive way possible: handing a monopoly to their inefficient, overpriced buddies in the Building Trades Unions.
Rumours abound that the Pattullo project is down to a single bid – SNC-Lavalin. Less competition, of course, means higher prices. Previous experience with such union monopolies have driven construction costs up 25 to 35 per cent.
And we haven’t even talked about external forces – our competitors Alberta and Washington State rejecting carbon taxes and making it as friendly as possible for businesses to locate there. The Mad Tweeter-in-Chief in the White House. Steel tariffs. The fights with China. The punitive new tax regime on immigrants and investors. The stalled-out U.S.-Mexico-Canada trade deal. It all drags the BC economy down.
I think James knows all this. That’s why the renters’ rebate has quietly disappeared from NDP talking points. It’s why St. Paul’s Hospital is being built without the union monopoly. It’s why there are a record number of portable classrooms in Surrey. It’s why many of us have heard that she is reining in the spending of her fellow cabinet ministers.
We take no joy in seeing the BC economy begin to slow – it means real families will be hurt financially. But when a government adds $6 billion in taxes, endless red tape, and bloats spending, it’s bound to happen.
As sure as the Falcons blew their 28-3 lead, so the NDP will blow the economic boom left by their predecessors.
Winter is coming to the BC economy. Prudent people will be prepared. And the fools who write fawning, uncritical columns today will see their analyses age very poorly indeed.
Jordan Bateman has a long history of public policy work, championing small business and fiscal responsibility. Currently the Vice President, Communications & Marketing for the Independent Contractors and Business Association (ICBA), Jordan also served six years as the B.C. Director of the Canadian Taxpayers Federation, and was a two-term Langley Township Councillor.
