Kevin Libin: B.C. has little ammo to take shots at Alberta

The B.C. Liberals’ throne speech, Tuesday, pointedly paid tribute to a lot of historically marginalized groups. Lieutenant Governor Judithju Guichon recognized the Songhees First Nation, and also the Esquimalt. She offered a hot thanks for visiting new immigrants. And she wished a contented Lunar New Year to the Chinese, Japanese, Koreans, Vietnamese and Mongolians in the home.

Then she switched gears and did a little trash-talking of another historically marginalized group: Albertans. Noting that B.C.’s economy “leads Canada,” Guichon recounted the Aesopian tale from the province to the east which had foolishly squandered its fortune. “Consider our neighbours in Alberta – a province of similar size, as well as blessed with natural resources. Over the decades, Alberta lost its focus. They expected their resource boom not to end, didn’t diversify their economy and lost control of government spending.”

For B.C., she continued, “it has never been more essential to stay vigilant – we should continue to strive with determination, and resist the temptation to spend our way into trouble.” Within this story, the thing is, Alberta may be the reckless grasshopper. And B.C. is, by contrast … Ralph Klein, I guess.

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After years of waiting in the Western shadow of wealthy, booming, low-tax Alberta, it’s not surprising that Christy Clark’s B.C. Liberals are enjoying a long-awaited moment in the sun. Clark herself being ranked just a week ago through the Fraser Institute because the premier with Canada’s strongest fiscal performance.



Her throne speech rightly bragged of the Liberals eliminating a large number of barriers of bureaucracy. It promised to push for the Trans Pacific Partnership. And it struck a refreshingly muscular tone against anti-industry groups that will begin to see the province’s mining sector shuttered. But what sounded most impressive is that the province vowed to control spending, and, within the mould of Ralph Klein, pay off its debt in 4 years.

Or rather, the federal government was careful to state it would repay in four years only its “operating debt.” That means debt from program spending rather than capital paying for infrastructure. Because, in reality, B.C.’s debt shows no manifestation of shrinking.

In the 15 years the B.C. Liberals have reigned, net debt is continuing to grow from $25 billion (or $32 billion when Clark became premier) to surpassing $40 billion. To be fair, the province has reduced its net debt-to-GDP ratio from over 18 percent to 16. However the throne speech also boasted of “$7 billion dollars’ worth of ongoing infrastructure projects” while promising more in the future. Even by the Fraser Institute’s ranking, B.C. ranked worse on keeping spending in line with inflation and population growth than even Ontario did – although, again, stronger GDP growth helped counteract that. B.C.’s program spending per capita has grown under Clark far slower than Alberta’s, but nonetheless faster than Saskatchewan’s or Ontario’s.

One thing the throne speech made no reference to was reducing taxes. Clark hiked corporate income tax in 2013, to 11 per cent, still lower than Alberta and Ontario, only marginally. Anyone earning more than $151,000 pays more tax in B.C., at 14.7 percent, compared to Alberta (13 per cent) or Ontario (12 percent). And the province still hasn’t found a method to fix the additional costs of capital purchases created by deharmonizing its PST.

For the record, Alberta actually ranks better on indexes measuring employment diversification than B.C. does (Alberta GDP’s reliance on gas and oil has substantially shrunk because the ’80s). Meanwhile, Clark still appears to be banking a lot of her confidence around the promise of getting LNG exports up and running. But to date, that plan has served up only setbacks and disappointments. Hopefully that changes. But when this is the prerequisite before B.C. starts lowering taxes and paying off its actual debt, then all that makes Clark seem even remotely like the next Ralph Klein is the fact that you will find very few other fiscally conservative premiers around to challenge her for that title.