Vaughn Palmer: Since becoming premier in late 2022, David Eby has presided over an astonishing decline in provincial finances.
VICTORIA — Since becoming premier in late 2022, David Eby has presided over an astonishing decline in provincial finances.
The starting point was Nov. 25, a few days after Eby took the oath of office. Then-Finance Minister Selina Robinson released an update on the state of provincial finances left behind by departing Premier John Horgan.
It showed that for the first six months of the financial year, the province was on track for a $5.7-billion budget surplus.
With the help of Finance Minister Carole James and her successor Robinson, Horgan had managed to navigate the pandemic, wildfires, and floods. He had managed to retire the direct operating debt of the province. And if the forecast held, the province would end the financial year with a record surplus.
The surplus was partly from revenue windfalls that might not be repeated, Robinson warned.
“These numbers that we’re seeing here, this is a soft rebound,” she told reporters. “We don’t know if these numbers are going to hold year over year.”
Neither Robinson, nor her sense of caution — nor, indeed, the surplus itself — would last much longer.
She and Eby did not get along during Horgan’s time as premier. They clashed on treasury board, the cabinet committee overseeing spending. Robinson, as finance minister, was committee chair. Horgan eventually had to remove Eby from Robinson’s committee, a slight that Eby did not forget.
Less than two weeks after Robinson presented the update forecasting a record surplus last November, Eby demoted her to the ministry of advanced education.
The new finance minister was Katrine Conroy. “The premier and I will be working closely,” Conroy told reporters, then quickly added, “the premier has his priorities.” Lest there be any doubt over who would be calling the shots.
With the premier’s office giving orders and the dutiful Conroy signing off on the paperwork, the government liquidated the surplus at a rapid pace, determined to get as much money as possible out the door before the March 31 end of the financial year.
Some of the transfers were so rushed, and some of the cheques so blank, that the ministers on the receiving end had difficulty answering questions in the legislature about how the money would be used.
“Jump starting our re-election campaign,” was the honest answer, but no New Democrat dared say it.
When the books were closed on the 2022-23 financial year, Horgan’s $5.7-billion surplus had been reduced to $700 million.
Eby was just getting started. The next budget was presented to the legislature with a $4.2-billion deficit. The Eby government overshot the target by 20 per cent, closing the books on 2023-24 with a $5-billion deficit.
Could he top that? He could. In early 2024, Conroy presented a budget forecasting an $8-billion deficit. Which was still not enough.
On the eve of the October election, she boosted the forecast to $9 billion. After the election, it was hiked to $9.4 billion.
By then, Conroy had retired. The only finance minister in modern times to not produce even the semblance of a plan to balance the budget, she had never shown a flicker of concern about that failing.
When the country’s parliamentary finance officer singled out B.C. for the least sustainable finances of any province, Conroy never let on that she had even read the report.
Eby’s next finance minister, appointed in a cabinet shuffle after last year’s election, was Brenda Bailey. In her December financial update, Bailey disclosed a 20-per-cent overrun, long denied by the New Democrats, on the Pattullo Bridge.
She also claimed to be working on a plan to balance the budget. Yet her first priority was to implement a “grocery rebate” of up to $1,000 for families and $500 for individuals, an election promise costed at $1.8 billion.
The rebate has since been scrapped. Not because it was already unaffordable when the New Democrats promised it in early October. Rather, they blamed the Trump tariffs, announced weeks later.
This week, Bailey presented a budget and three-year fiscal plan with greater deficits and debt than ever before.
The total provincial debt was $89 billion the year Horgan left office. It is now scheduled to grow to $209 billion. Debt, measured as a share of economic output, was around 23 per cent in Horgan’s last year. Eby would boost it to 43 per cent.
Interest payments, already $3 billion a year under Horgan, are scheduled to climb past $7 billion under Eby. The latter is greater than the budget for every ministry, save health and education.
As premier, Horgan presented five budgets and closed the books on a sixth. Four were surpluses, only two were in deficit, and one of those was during the pandemic.
Horgan had worked as a staffer in the NDP government in the 1990s. He knew the party had been relegated to the Opposition for 16 years after the mess it made of finances.
He was determined to leave behind a better fiscal record, and mostly he did. In a little over two years, Eby has thrown it all away.