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Written by Citizen staff
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Thursday, 27 November 2008 |
The best part of B.C. Finance Minister Colin Hansen's latest economic punditry is he didn't look, smell, or sweat like U.S. Treasury Secretary Henry Paulson did on the same Monday.
That may seem like a modest accomplishment, but watching a man as big and bald as Paulson quietly twitch like an electrocuted ferret as outgoing President George W. Bush defended the Citigroup bailout underlined how hard it's becoming for decision-makers to assume anything but the fetal position during this most recent world financial crisis. The only thing missing from the treasury secretary's performance was the gut-jumping heartbeat soundtrack from Midnight Express and Paulson breaking down screaming, "Why are you listening to this man? He can't even say Peru right!" as Secret Service agents rush to drag him away.
Paulson's nerves are understandable. The U.S. economy is being hammered by a historically-sized Category 5 maelstrom and the best minds of the Bush administration have come up with a program named . . . TARP. Apparently the concept is to jerry-rig a lean-to for the financial system and pray it doesn't blow away before Obama arrives to take the blame.
Hansen was a little better -- he looked about as uncomfortable as a politician should when announcing the B.C. government will probably take in $3 billion less in revenues over the next three years.
An $804-million decline in provincial revenues for 2008-09; dramatically reduced projections for B.C.'s real GDP growth of 1.4 per cent in 2008 and 1.3 per cent in 2009; income from B.C.'s forests down $38 million; the province mired as the eighth of 10 provinces in export performance; "very little opportunity to put in new programs or, indeed, expand programs."
Still, some bright spots. Hansen pointed out, in terms of GDP, the province is expected to do better than most North American jurisdictions (the rosy side of his prediction is that the U.S. and Canada's economy in general are expected to shrink next year; the bleaker part is Hansen declined to mention B.C.'s Central 1 Credit Union's latest guess of the province growing 0.5 per cent, which was included in his quarterly report). He admitted that the volatility working its way through the system made it very hard to budget -- hence a nifty $500-million "forecast allowance" -- but said there's still an estimated $450 million surplus in B.C.'s coffers.
The main problem is, sadly, one of ideology. The entire B.C. Liberal brand is built, as the tyee.ca discussed in a recent article, on not running deficits. By law, the province's revenues must exceed expenditures.
Unfortunately, there's a growing consensus among many economists that the way out of this mess is government spending, spending, and spending again. But, if government revenues are set to go down, that would mean a deficit.
It's an unfortunate dilemma for Premier Gordon Campbell. He can try to somehow keep B.C. in the black, with the choice of either slashing programs or resorting to the financial alchemy of a fudged budget. Or he can run a deficit and endure the endless accusations of hypocrisy from an increasingly noticeable NDP.
A nasty problem. Hopefully, it won't drive Hansen to start doing a Paulson the next time he appears in front of a camera.
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Last Updated ( Thursday, 27 November 2008 )
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Probably from every Province except Saskatchewan.
Now, who would have thought it??