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B.C. Liberals tout $2.8B surplus, reduced debt on eve of expected defeat

FILE PHOTO - B.C. Minister of Finance Mike de Jong speaks to reporters as he arrives for a working dinner with federal Finance Minister Bill Morneau and provincial and territorial colleagues, Sunday, Dec. 18, 2016. De Jong has painted a rosy picture of the province's finances one day before his government is expected to be defeated in a confidence vote.
Image Credit: THE CANADIAN PRESS/Justin Tang
June 28, 2017 - 7:45 PM

VICTORIA - British Columbia's finance minister has painted a rosy picture of the province's finances a day before his government is expected to be defeated in a confidence vote, saying a $2.8-billion surplus helped support a bevy of new promises in the Liberal throne speech.

The unaudited fiscal update released by Mike de Jong on Wednesday says the higher-than-expected surplus in the 2016-17 fiscal year helped reduce the province's taxpayer-supported debt by $1.2 billion, while its operating debt decreased by $3.4 billion.

The Liberals campaigned in last month's election on a platform of fiscal restraint and criticized the Opposition New Democrats for making costly promises, but in the throne speech last week they adopted many of the NDP proposals totalling $2.6 billion in new spending over three years.

The NDP and Greens, which won a combined 44 seats in the election, have agreed to bring down the Liberals, with 43 seats, in a confidence vote on Thursday, with the aim of allowing the NDP to form a minority government.

De Jong said the Liberals based their February budget and campaign platform on projections from the economic forecast council, which at that time had an "abiding pessimism," and he only learned of B.C.'s stronger finances from the council June 6.

"We didn't think we had that money in February," he said.

The throne speech included numerous policy reversals for the Liberals, including an increase to welfare rates and a commitment to cancel tolls on two Metro Vancouver bridges, a NDP promise that de Jong had warned would strip B.C. of its triple-A credit rating.

De Jong said Wednesday that giving up the tolls would cost the province about $400 million over three years.

Green Leader Andrew Weaver said the timing of the update before the confidence vote is unusual. The unaudited numbers can only be viewed as a draft at this stage and the province must wait to see if they hold up to scrutiny, he said.

"It is encouraging to hear that B.C.'s economy is doing well. However, releasing this information out of political calculation is inappropriate," he said in a statement.

The government usually provides the year-end financial update in July after it has been examined by the auditor general. De Jong said he expected the audit to be complete by July 10, but he felt it necessary to deliver the news now.

"I thought it appropriate on the eve, or as there is likely to be a transfer of power, to disclose to British Columbians the state of the books," he said, adding he expects the numbers to be "virtually identical" after the audit.

De Jong said GDP growth in 2016 dramatically outstripped forecasts. The budget forecast 2.4-per-cent growth, while actual growth was 3.7 per cent, he said.

Strong employment growth, housing starts, retail sales and exports all helped to drive that GDP boost, he said.

The economic forecast council predicts 2.9-per-cent growth in 2017, up from its January forecast of 2.3 per cent, de Jong said.

De Jong remarked wistfully several times that it was likely to be his last day as finance minister, a position he has held since 2012.

He was asked if the strong economic outlook would make it harder for the Liberals to criticize NDP spending. De Jong replied that a government also needs to create policies that allow the economy to flourish.

"I fear that as pleased as the new government, a new NDP administration, will be to inherit this, they will quickly lose sight of what it was that created this circumstance in the first place."

— By Laura Kane in Vancouver

News from © InfoTel News Ltd, 2017
InfoTel News Ltd

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