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Lies My Public Sector Union Leader Told Me

Author: Mark Milke 2002/01/15
British Columbia's civil service job cuts will be in the middle of what other every other province and the federal government did in the 1990s, but you'd never know that by listening to public sector union leaders. Their Chicken Little routine is relentless. Given their scare tactics and outright fibbing, here's a guide to two prominent fibs British Columbians will hear from the public sector over the next while:

Fib #1: "B.C.'s cuts in spending are more radical than anything ever seen before in Canada!" If the government's proposals are anything to go by, provincial government spending will be cut by 11.3 percent over three years. The most radical Hardly, and incorrect. The Alberta government cut program spending by 21 percent over three years, while federal Finance Minister Paul Martin cut program spending by 14.5 percent between 1993 and 1997. On the other side, NDP-led Saskatchewan cut spending by 10.1 percent between 1991 and 1994. Ontario, home of the supposed budget "slasher" Mike Harris, never used the axe, but instead used a scalpel to trim spending by only 2.3 percent in 1996, before spending started upwards again.

All of this data is freely available in provincial and federal budgets for those who care to look it up. British Columbia's planned program expenditure cuts vis-à-vis the experience of other provinces and the federal government in the 1990s put B.C. right in the middle of the pack.

Fib #2: "Cuts under Bill Bennett's restraint program in 1983 led to/deepened the recession in British Columbia." There is nothing so fascinating as the bizarre argument that taking money out of the private sector and giving it to government will "help" the economy. According to public sector union leaders, when governments "allow" more money in the private sector through lowered taxes - the sector that is almost always more efficient, that somehow hurts the overall economy. The 1990s in B.C. (with higher taxes, higher spending and more debt) should have been proof positive of this failed argument, since real incomes declined and the net inter-provincial outflow of residents was dramatic after 1996, but hey - why bother with facts.

Here's the historical data surrounding B.C.'s economy in the early 1980s, from the 1990 British Columbia Economic and Statistical Review (measured in 1981 dollars). Program expenditures rose by $475 million between 1980 and 1983, and dropped marginally by $50 million between 1983 and 1984. When interest costs are factored in, overall government spending increased every single year despite the restraint program.

Bill Bennett's restraint program -which essentially slowed program spending but did not cut it for any year except 1983 - was needed because spending and debt interest payments were outstripping revenue growth, especially after 1981. British Columbia's deficits were $256 million in 1981, $184 million in 1982, $984 million in 1983, and over $1 billion in 1984.

Did Bennett's 1983 restraint program worsen the recession that began in late 1981 Here's a look back: In 1980, provincial real Gross Domestic Product (GDP) was $41.4 billion, which climbed to almost $44.7 billion in 1981. In 1982, as a result of the worldwide recession, the economy turned sour and GDP dropped by $2 billion to $42.7 billion. By 1983 - the year of the restraint program - provincial GDP grew marginally by $200 million to $42.9 billion, and to $44.3 billion by 1984. Thus, the 1983 restraint program didn't "worsen the economy." That economy was already in a very tepid recovery by 1983, and the trend accelerated in 1984. Government spending cuts - especially combined with tax relief for the private sector - don't kill economies, but dumb tax, regulatory, and investment policies do. But don't expect to hear that from public sector unions.

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