The province’s finance minister, Carole James, has commissioned what she’s calling a “fiscal sustainability review.” A retired deputy minister of finance, Chris Trumpy, has been hired to conduct the review.
Trumpy will examine several of the major Crown corporations, plus a sampling of schools, universities, colleges and health authorities (the so-called SUCH sector). The objective is to determine whether these arm’s-length agencies are submitting accurate spending and revenue estimates.
On its face, that makes sense. The Crowns together contribute about $3 billion to the provincial treasury (most of it from the Liquor Distribution Branch and the B.C. Lottery Corporation), while the SUCH agencies account for 40 per cent of the government’s spending budget.
However, James says the review is also intended to “identify options that will assist the province with … managing to its overall fiscal plan targets.” The implication appears to be that this is more than a forecasting exercise. It might also be an attempt to determine whether some cash can be recovered by ransacking cupboards.
This isn’t the first attempt to squeeze Crown corporations. Some years ago, Christy Clark’s B.C. Liberal administration put B.C. Hydro, ICBC and the Lottery Corp. through the wringer.
More than 1,200 staff were let go, and scandalous bonus packages were cut back. The government claimed savings of $800 million at B.C. Hydro alone.
Unfortunately, it’s unlikely a second round of cost-cutting will bring in as much. Both B.C. Hydro and ICBC are stretched to the breaking point.
Looking for savings in the SUCH sector is an even more dubious proposition. Several years of tight budgets have left these agencies in very tough straits.
And what options there are might be unpalatable. It’s hard to imagine an NDP government cracking down on schools after making education a budget priority.
Likewise, provincial governments have historically shied away from micromanaging post-secondary institutions.
That leaves the health-care system. But B.C. already has the most efficient hospitals in Canada. And our disgracefully long wait times for elective surgery, coupled with the shortage of family physicians, make a case for more spending, not less.
We might question why municipalities were left off the list. It is by now abundantly clear that some local governments in the capital region have no idea how to manage compensation packages.
Victoria city council paid $2.475 million to 26 senior managers who retired, quit or were fired between 2013 and 2016. But severance allowances aren’t usually granted to employees who retire or leave voluntarily.
If savings must be made, this would have been a better place to start. Yet here, too, both Liberal and NDP administrations have usually stayed on the sidelines. The standard view is that municipalities are accountable to their electors, not to the province.
As a result, most of the cupboards to be ransacked are either bare or effectively off limits. A skeptic might conclude that Trumpy’s review is mainly for show.
In her fiscal update last month, James raised several taxes, yet still predicted the slimmest of surpluses. Even then, many of her party’s more expensive commitments have yet to be funded.
Some, such as the promise to build 114,000 rental, co-op and social-housing units over 10 years, have been called unrealistic by some experts.
Is it possible the minister’s real purpose in commissioning the review is to say: “Look, we’ve searched for every possible economy. The money’s not there, and some of our plans will have to be slow-walked”?
We’ll find out when next February’s budget comes down. Nevertheless, at the outset, James’s task appears daunting.
