VICTORIA: The Canadian Taxpayers Federation (CTF) reacted to the B.C. provincial budget with disappointment today, as government spending increases on infrastructure and social services, without the revenue to support them, means a return to deficit financing and a bigger debt. 

“Deficits today mean higher taxes in the future, burdening future generations,” said Maureen Bader, BC Director of the CTF. “ To stimulate the economy, the government must reduce the barriers to working, saving and investing by reducing spending and further lowering tax rates.” 

The deficit, expected to be $495 million in 2009/2010 and $245 million in 2010/2011, will lead to a debt load of $47.2 billion by 2011/12, up from $37.5 billion in 2008/09. The budget outlines $14 billion in infrastructure investment to stimulate the economy and create jobs. This is in addition to the previously announced $14 billion transit spending for the Lower Mainland of B.C. 

“The government is trying to sell deficits as a quick fix to the economic downturn, but infrastructure projects take a long time to get off the ground,“ continued Bader. “Past government infrastructure projects inflated construction costs and augmented a skilled labour shortage. Planned projects could once again hurt the private sector and delay the economic recovery.” 

In addition to deficit financing, the government is reallocating tax dollars from other areas of government to health care, education and social services. Approximately 90% of new spending announced in this budget will go to health care. 

“Government should not wait for a downturn in revenues to reduce waste in government,” said Bader. “While the reduction in government administrative spending is welcomed, the massive increase in health care spending without reforms to a sick system, mean a continued drain on family incomes and no fundamental improvement to the health care system.”