CANADA

Strategic budgeting

The B.C. government balances the books

JOHN PIFER April 10 1989
CANADA

Strategic budgeting

The B.C. government balances the books

JOHN PIFER April 10 1989

Strategic budgeting

The B.C. government balances the books

CANADA

After the October, 1986, British Columbia election, Premier William Vander Zalm told Social Credit followers that the tax increases and program cuts needed to reduce the $1.16-billion provincial budget deficit had to be dealt with early in his term. As a result, Finance Minister Mel Couvelier’s first two budgets included such measures as a 40per-cent increase in medicare premiums and less spending on the environment and education. Couvelier’s economies were widely unpopular, but last week they paid off. The minister tabled a $13.5-billion budget, raising spending by 13 per cent, avoiding major tax increases and, by drawing on a contingency fund, producing British Columbia’s first balanced budget in 10 years.

In doing so, Couvelier—nicknamed Dr. No because of his tightfisted policies—became only the second provincial finance minister to balance his books since 1985. Last month, Prince Edward Island Finance Minister Gilbert Clements balanced his province’s budget for the first time in 15 years. By contrast, the Saskatchewan and New Brunswick budgets introduced last week registered a shortfall. Slapping a 10-per-cent tax on the sale of lottery tickets, bingo cards and other gambling, Saskatchewan Finance Minister Gary Lane trimmed his deficit by $102 million, but it remains at $226 million. In New Brunswick, Finance Minister Allan Maher slightly increased taxes on tobacco, cigarettes and leaded gasoline while forecasting a $264-million deficit, up from this year’s $228 million.

Couvelier had been under pressure to restore Social Credit’s sagging fortunes as a result of Vander Zalm’s own declining public popularity and the party’s two March 15 byelection losses to New Democrats. He increased spending on the environment by 90 per cent to $200 million, and on education by 13 per cent—to $3.2 billion. Polls showed public support for both moves. But critics said that the government’s claim to have balanced the budget was misleading because there would have been a $375-million deficit if Couvelier had not dipped into a budget stabilization fund created last year to cover emergency spending. But with more than $1 billion left in the so-called rainy-day fund, there was plenty left for more positive budgets—before Vander Zalm has to call an election in 1991.

JOHN PIFER in Victoria