BC's government has long argued that its inability to balance its books was due primarily to the Asian flu and to reduced federal transfers. Too bad BC's politicians are spouting information that is either outdated (blaming reduced transfers from Ottawa) or incorrect (low oil prices hit Alberta much more severely two years ago when compared with the Asian flu's effect upon BC.)

Recently updated budget numbers from the province again puncture several of the leading myths about BC's budget woes. Let's start with federal transfers. Back in 1995-96, Ottawa transferred almost $2.4 billion to British Columbia, which declined to just under $1.95 billion in 1996-97. According to BC's Second Quarterly Report, BC will receive $2.35 billion this year in federal transfers, almost what the province received four years ago.

BC's politicians may argue that inflation and population growth mean BC is still getting less that it used to, but that misses several key points. One: The money comes from taxpayers regardless of which government first collects it, and many of those taxpayers take home less than they used thanks to Canada's high-tax policies which have negatively affected take-home pay. Two: Ottawa now hands over $500 million more to BC annually than it did three years ago at the depth of federal ‘cuts'.

Besides, every other province also had their transfer payments cut earlier this decade, but two out of the other three ‘have' provinces still managed to either produce surpluses (Alberta) or cut taxes substantially (Ontario). And both of those provinces will now begin to copy each other's successes. Ontario will soon produce surpluses (and begin paying down their debt,) while Alberta will cut taxes substantially beginning in January 2000.

BC meanwhile, has neither cut taxes substantially nor produced a balanced budget, and has no plans to do either within the next two years. The province's tax cuts (which allow more room for wealth and job creation in the private sector - the only sector that can create it) have been minor.

And the budget ‘cuts' which would make BC's size of government more moderate, less intrusive, and less expensive for taxpayers, have been also been shallow. To add to the aggravation of BC falling further behind on balanced budgets and tax cuts, it turns out the province is quickly increasing the amount of money it takes from Crown corporations. Back in 1995-96, the province skimmed away about $970 million from crown corporations to put into general revenues. The current forecast is for over $1.6 billion.

Thus BC's government has become increasingly reliant on federal transfers and on Crown corporation dollars (taxes in drag) to fund its spending addiction, and despite that, is running record deficits.

One last thought: When the Asian flu hit BC, low oil prices hit Alberta at the same time. Interestingly enough, Alberta's revenues plummeted much more severely than did BC's and yet Alberta still produced a balanced budget even though it faced the same pressure as did BC. Alberta had control of its spending side. BC never has. Therein lies the difference.