(Vancouver) BC’s budget forecasts have become more fiction than fact, says the Canadian Centre for Policy Alternatives (CCPA) in its BC Solutions Budget 2007.
Since 2002, provincial budgets have underestimated the year-end balance by a total of $10 billion (based on financial reports from the Ministry of Finance) due to extremely pessimistic revenue projections.
“Low-balling revenues means we don’t have a proper democratic debate about what to do with surpluses,” says Marc Lee, the Centre’s senior economist. “At the end of the year, these massive surpluses are put to debt reduction rather than meeting BC’s pressing social needs.”
Recent CCPA budget forecasts have been far more accurate than those of the federal and provincial governments. BC Solutions Budget 2007 shows that the surplus for the current fiscal year (2006/07) is likely to reach $3.3 billion, rising to $3.6 billion next year (2007/08).
The province’s recent announcement of increased health care spending next year will draw down some of the surplus. But significant funds are still available for other priorities.
“The government must take bold action on poverty and homelessness if we are going to see improvements before the 2010 Olympics,” says Seth Klein, the CCPA’s BC Director. “We call for a 50% increase in welfare rates, $200 million in enhanced services to children and families and 2,000 new units of social housing in 2007/08.”
The Solutions Budget also recommends significant new investments in child care, and environmental measures to address global warming and deal with the pine beetle epidemic. It cautions against further tax cuts, noting such measures only reinforce growing inequality, and instead calls for surpluses to be fully re-invested in public programs.
In calculating a number of possible budget scenarios, the CCPA finds that even if BC entered a major economic downturn this year, the available surplus room for 2007/08 would still be over $2 billion.
For more information or to arrange an interview, call Marc Lee at 604-801-5121 x228.