Excerpt from the Official Report of


February 21, 2013

Remarks on the 2013 provicial budget

S. Simpson: I'm pleased to have the opportunity to take my place and join in the budget debate for 2013.

As we all know, this will be our last session before we head to the election in May, and for a number of members here on both sides who have chosen to leave, this will be their last session. I'd like to wish all the members who are choosing to retire well and hopefully a healthy and long retirement and maybe a number of new adventures and other adventures along the way — members on both sides. I do know that for all the back-and-forth here, the members do, I believe, on both sides, make genuine efforts to do the best job they can to represent their constituents in this place.

For those members who may not come back, not necessarily of their own choice, I'd wish them all well, too, in whatever they choose to do in the future.

A comment just about my constituency before I focus on the budget here. I do want to thank the people of Vancouver-Hastings for the last better part of four years, the opportunity to be here and, of course, look forward…. I hope that they'll see fit to have me come back for another four years, but that will be their choice to make on May 14.

I do certainly want to thank the people who have been very active, particularly, in supporting me in my constituency. There are my staff who work in my office in Vancouver — Brenda and Rachel and Heidi — and, of course, Susan and all the people who are supportive of me here in Victoria and then, of course, Cate and Shayla, my family. I'm sure we all know that we owe our families a great debt to give us the opportunity to come here and to be here.

In regard to the budget itself, the real debate and the debate that will be had…. It's ongoing now, and I believe it will be a significant part of the debate that will lead right up through to the election. That debate will be: is the budget credible? And the debate will be: is the budget credible in a number of ways?

There will be, of course, the issue of: is the budget credible in terms of the claims of government that it's balanced? We're going from a situation where, at the end of this fiscal year, we know that the government's looking at a deficit of about $1.2 billion, claiming to go to a pretty razor-thin surplus of a couple of hundred million dollars next year. That's a $1.4 billion dollar shift, and the issue for British Columbians will be: is that credible? Is it real?

What heightens that issue, quite honestly, for British Columbians is that they will reflect back to the last pre-election budget that the B.C. Liberals put in front of British Columbians. Members might recall that Premier Campbell, on that day, made the commitment…. And we all know that it was a difficult time, the 2008 economic challenges that faced the world. Across the world people were facing tough times, and nobody expected it to be any different here. But Premier Campbell at that time told the people — and committed to the people of this province — $495 million maximum for the deficit coming out of that year.

We, of course, all know that we had a deficit that was billions of dollars greater than that amount at the end of the day. Of course, as a side to that…. It probably has been one of the most remarkable political decisions, and it will go down in the history books as a political decision by a government — to then advance the HST, the harmonized sales tax, as a way to generate $1.6 billion to offset that. We all know the four years that have ensued since then, leading up to an issue that still continues to not be resolved until we presumably pass this piece of legislation sometime later in this session that will reintroduce the PST.

That's the problem here, and it's the problem for 2013. The people of British Columbia felt badly, badly betrayed by that budget. They felt badly betrayed by the budget because there was such a firm claim, a claim that obviously was not within the realm of reality when it came to the actual impasse. People were hard-pressed to believe in any way, shape or form that the government did not know before election day in 2009 that the $495 million, maximum, was not a real number. It wasn't a real number, and I believe that people were well aware of that. I think that's what created anger.

Then, of course, the anger that followed that was the whole process around the HST and how it came to be — in the commitments that were made before and then the realities afterwards. We all know the story that unfolded after that. It was one of the most remarkable backlashes against a decision by a government by a population and electorate that felt absolutely betrayed by their government — absolutely betrayed. That created the problem.

What that has done now, of course, is created the situation that we have today where the government has presented a budget, wants people to believe that it will achieve a razor-thin balance and is doing this with numbers that folks aren't too sure about on both sides, both on the expenditures and on the revenue side. We'll talk about that in a minute. Because of that, the confidence that British Columbians have that we aren't going to see the fifth deficit budget in a row by this government — the fifth one in a row…. They're not at all convinced that this is a real deal — not at all convinced.

You know, this is the government that has run seven deficit budgets in its time. It's had more deficit budgets in its time — $4 billion of deficit over the last four years. Pretty remarkable for a government that's supposed to be fiscal whizzes.

The reality is this. Let's look at the budget, and let's look at the concerns that people have. Let's start with issues related to the revenue side. I'm sure all those members will get a chance to get up and speak to the budget when their time comes.

First of all, I heard one of the previous speakers talk about Mr. O'Neill, who came and did some work for the government. Mr. O'Neill is a very, very well-respected economist, and there's no question about that and about his credentials and his ability to look at these kinds of things.

Mr. O'Neill was also pretty clear when he looked at the numbers. First of all, of course, he only looked at the revenue side. Second, he didn't look at the Crowns and at the issues related to the Crowns. It would have been extremely difficult for him to have made any firm assessment about this asset dump that the government is engaged in to generate some $800 million of revenue.

To just give a sense about that, we'll talk about another really accomplished economist in this country, Don Drummond, who did extensive work for the government of Ontario. One of the pieces of advice that Mr. Drummond provided to the government of Ontario was not to say — and nobody is saying you don't sell…. Governments buy and sell assets all the time, and that's a totally appropriate thing to do. But what he said was: "Don't count your chickens before they're hatched." What Mr. Drummond said is that you don't look to be booking assets before you in fact know what you're getting for them.

I would think this government would have had a pretty good experience with that. The Little Mountain project, that piece of property, has been booked one, two…. This will be the third year that the Little Mountain property has been booked as a sale, and this year it might actually happen, as I understand. The sale might actually go through this year, but it's been booked three years in a row.

The question is when you book…. You've got 100 properties of some sort. Some of them obviously will sell, and that's fine. You're claiming upwards of $800 million of potential asset here and booking it in as the best way to balance the budget.

Mr. Drummond quite rightly said: "Don't book that stuff before you actually sell it and put the money in the bank." Not a bad piece of advice. But that's not what we're doing here, because there is a desperate need to balance this budget at this time.

There are a number of areas. One of the other areas that's kind of interesting…. This is an area where Mr. O'Neill didn't look, because it wasn't part of his mandate. Of course, the other thing he said in his mandate is he had a very brief period of time to do this work. So in some areas the look, I think, was…. You know, he was being careful when he released his information because it was a bit cursory. I don't doubt he did a good job, but it was a bit cursory.

What did he say? He talked…. What he didn't say…. One of the things that we know is also an issue here, of course, is where the dividends come from. We know in this case, of course, that the government has booked a $245 million dividend from B.C. Hydro as part of the revenue stream here.

Now, this is at a time when we know that B.C. Hydro is sitting on about $18 billion or so of debt. That's debt in the deferral accounts. It's debt in commitments that have been made. It's an entity, a Crown, that has been put in a very challenging and difficult situation.

Yet because of the use of deferral accounts and the magic that the Liberals have created around deferral accounts, they're still claiming here, for a company that is in that financial situation, that they will claim about $750 million over the next three years of dividend without at all addressing the issue of deferral accounts, without addressing that question at all in a way that would make any of that dividend credible.

So you've got $1 billion plus sitting out there just on those two items alone that are suspect at best and $197 million surplus. That's why you're hearing from this side and from others that this budget is simply bogus. It is simply bogus.

The other issues that relate to this also relate to the question of expenditure and expenditure control and how that really looks. The government here has said that they will control expenditures down to 1½ percent. That is the claim. Now, we haven't seen 1½ percent over the life of this government, pretty much. That kind of claim. Yet they're claiming they can do 1½ percent this year. They're claiming that they can cut….

In last year's budget the projection for growth in health care was about 3.8 or 3.9 percent. The claim this year is it will be…. That has been adjusted. That was the claim, that for this upcoming year, in the three-year outlook, it would be 3.8 or 3.9 percent. Now, of course, we're seeing the government claim it at about 2.6. That's a pretty tough thing to do, if you look back over the history of expenditures in health care.

If the government is going to claim that number, then I think it's incumbent on the government to be pretty straight with people about what the impacts of that are on service delivery. Nobody believes you are going to reduce the growth of costs there without having a real and material impact on services. Yet the government is not prepared to be forthright with people about what that will be. That's a problem.

Two other areas where we see the same issue. In question period today we discussed forestry issues. The issue here is forest health. We know, of course, that we're seeing a pickup in demand in the United States as the housing industry starts to improve. We're going to see, hopefully, some improvements and growing improvements in our forest sector and better opportunities there.

Well, to take advantage of those opportunities, not just in this coming year but in the years to come, it becomes really incumbent that we deal with those forest health issues that we hear about time and time again.

There are issues around inventory. There are issues around a long-term plan. Yet what the government did here is took $35 million out of the budget to essentially start to address those issues. They're not cheap issues to address, but that money has been removed. It has to raise a question about whether, in fact, we are doing what's necessary.

This isn't so much expenditure. This is investment. We know that the forests…. If we continue to see a rebound in the U.S., along with opportunities in Asia, there is a growing opportunity for our forest sector. But that will not be realized if we don't invest to ensure the health of that sector long term.

We're not seeing that investment today in a way that's meaningful, and this budget says that we certainly won't see any progress in the next year, if this budget is to be believed. So in an area where we can invest in economic opportunity, it's not there.

Of course, probably the single biggest area…. When we talk about the creation of economic opportunity in this province, there is a consensus, I believe — whether it's in the business community, in labour, in academia — that what we need to do is make sure we have the best-trained, best-skilled workforce we can have, whether it's in health care or in the trades.

That more than anything will generate investment and bring people to the province with their money, if they know the workers are here that can in fact meet their needs. That's a really important thing.

Clearly, we continue to talk about it. The government has spent $16 million trying to convince people they're dealing with it, through an ad campaign.

What do we actually see in this budget? What we see is a situation where the government simply hasn't addressed this issue.

What we know. The labour market opinion tells us: a million jobs in the next decade in British Columbia — maybe a million jobs. Across the board, we need training. Yet this budget talks about $46 million less in Advanced Education and the Industry Training Authority flatlined — 6,000 student spaces gone, based on the budget's own projection.

Yet what we know, of course, as these spaces disappeared, is we had increased demand last year. Somehow last year's increased demand is going to evaporate. If the Minister of Advanced Education, who spoke earlier today, is to be believed, if the Minister of Jobs is to be believed, we're going to be fine, even with 6,000 less spaces — a serious question about the credibility of this budget in terms of meeting cornerstone needs of British Columbians.

This issue of skilled tradesworkers. What we do know, of course, is…. Of that million jobs that are coming over the next decade or so, we're told about 150,000 of those will be skilled trades. We have seen this government engage in a process and be happy to be part of a process using temporary foreign workers to fill that need.

Just to give you a sense, in British Columbia we have 12 percent, 13 percent of the population of the country. We have 25 percent of the temporary foreign workers in Canada here, about double our per capita in our population.

Temporary foreign workers. Some of them work in skilled trades. Lots of them are in agriculture, obviously. That's a key area and an area where, obviously, those workers are needed. But we've also got these workers in Tim Hortons and Wendy's as well — remarkable.

What that raises is a serious question. When we're sitting on 25 percent of the temporary foreign workers, about double our percentage share of the population, it starts to raise questions about whether this program is being used to in fact offset the lack of effort and initiative on the part of the B.C. Liberals to train people up to take advantage of the jobs that are available here. A significant issue that clearly hasn't been addressed.

We know, of course, that…. We have heard from the representative for children and families, who has raised her concerns about the support for vulnerable children, about the support for children with disabilities and challenges. She has raised concerns about this budget and whether this budget will meet those needs.

She clearly is an authority on this. I would simply say to people who are watching this debate to go and read her comments. Listen to what her commentary is on this. She can clearly say it much better than I can as to what these challenges are, and they are challenges that need to be met.

What's the situation that we have here? We have a situation where you have a government heading into an election, a government that has significant credibility issues. We know that. Last week we released the Liberal caucus document on advertising where they clearly…. The document laid out the objective, which was to improve the waning credibility of the government and to invest $16 million to deal with that waning credibility.

We have a government that knows that it's in trouble, that it has a serious credibility issue. This government now has made the decision that they need to convince British Columbians, in fact, that this budget is balanced, yet the numbers don't make sense for a balanced budget. The projections around expenditures don't make sense in terms of being able to keep those numbers, of being able to achieve those kinds of numbers.

It is a budget that is simply bogus in terms of its ability to balance, and increasingly, British Columbians know that. It would be the fifth year in a row, I believe, that this government had not balanced its budget.

It erodes key economic initiatives. The budget does nothing to support key economic initiatives in this province. It does nothing to effectively support skills training. It does nothing to invest in skills training to ensure that we are giving young people, people in outlying communities, the opportunities to, in fact, get at some of those good-paying jobs that we all know are coming, that we're all hopeful are coming. It needs to start now, and it's simply not here in this budget.

We know that our forest sector — which has the opportunity to rebound and is starting to get its legs under it again — needs investment in forest health to ensure that it is as vibrant as it can be in the decades to come. We're not seeing the investment in that, and that is an investment in jobs and an investment in the future.

It ignores the reality of the cost pressures of health care, I believe. I think the result of that will simply be that those targets, the 2.6 percent, simply will not be met. Those numbers won't be met. The government would not be able to maintain to meet those numbers. We'd all like to see 2.6, but it's a hard, hard number to meet. I just don't believe that those numbers will be met without huge demand and criticism of government for the services that will disappear in order to get to that number.

We've talked about children with disabilities and children who are vulnerable. Their needs aren't going to be met either.

It's a budget that was designed and written with one objective in place, which was to try to shore up the failing support for the B.C. Liberal Party — no other reason. The budget was crafted to try to do that. We saw how well the throne speech went in shoring up the party. The throne speech was laughed out of British Columbia. It just was not credible in anybody's mind. We now have a budget that isn't doing much better.

I look forward as we move into the coming months — and we'll get through this session and the next couple of months — to debating the visions that will be in front of British Columbians: this budget and the vision that we will put in front of British Columbians.

When that happens, I'm very confident that British Columbians will look at them. They will look at ours. They will look at a positive move forward, they will look at the practical approach that we are going to take to accomplish prosperity in this province, and the people of British Columbia will make the decision.

When that decision is made, there will be a new future for British Columbia after May 14, because there will be a new government sitting on that side. That government will put British Columbians first — something for the first time in a decade.


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