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B.C. throne speech repackages old announcements, lacks courage and vision

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Yesterday's Speech from the Throne reads more like a list of what this government sees as its main achievements than a true framework for going forward. New initiatives are few and far between, sandwiched between pages of self-congratulatory recap of the natural gas strategy, the jobs plan and highlights from the last budget.

All in all, the throne speech disappoints with its failure to honestly communicate the true challenges our province faces, let alone offer credible solutions. Too many children live in poverty in our rich province, our hospitals are overcrowded, our schools cannot afford to provide kids with learning disabilities and special needs with the support they need to learn well, there's a crisis in seniors care, and climate change and income inequality threaten not just our sensibilities, but our economy, quality of life and survival. But while natural gas is mentioned 15 times in the throne speech, and mining and forestry also feature prominently, there is no mention of climate change, green jobs or income inequality.

The biggest news item out of the throne speech is the establishment of a BC Prosperity Fund to capture future natural gas royalties, but only starting in 2017, a full government mandate from today.

It's easy to make announcements for initiatives that would take place years down the road and that don't have to be costed out in the upcoming 2013 Budget (which will contain projections up to the year 2015/16, just before that new Prosperity Fund is supposed to kick in). But the throne speech is supposed to highlight government priorities for the coming year, not for the distant future.

True courage and vision would involve starting the Heritage Fund this year and launching a review of all natural resource royalties -- not just natural gas -- to ensure that the province gets a fair return on our publicly owned resources. We're already years behind Norway and even Alberta in recognizing that the benefits of our publicly owned -- and finite -- natural resources should benefit future generations as well, instead of being rolled into general revenue and spent in the year they're earned.

The BC Prosperity Fund is supposed to benefit future generations, which to this government apparently means: to pay off the provincial debt over a 10-year period between 2017 and 2027. This despite the fact that our debt levels are very reasonable as a share of the economy, and with current record low interest rates, the returns of public investments in early learning and childcare, to pick just one example, would far exceed the savings from paying down our debt. If the government is so concerned about the provincial debt, the courageous and visionary way to pay it off is by increasing taxes on the current generation, not by dipping into the resources allotted for future generations.

The other few announcements in the throne speech were too vague to evaluate. The true test of this government's priorities will come next Tuesday with the 2013 Budget, when we see how much funding (if any) each of these items receives:

1. A new trade-promotion-type organization to make Vancouver the hub for Asian and South Asian corporate offices.

2. A new yet unspecified initiative to benefit small business owners.

3. New legislation to establish a seniors advocate and end elder abuse.

4. Improvements for patients in rural and urban areas, and improvements to primary care.

5. New measures for families:

-  improving access to early childhood services (hopefully this time for all children, not just those who have a parent or caregiver available to take them to programs only during normal working hours, like Strong Start);

-  improving access and affordability of childcare;

-  measures to help parents save for their kids' education (hopefully not just another tax shelter for the savings of higher income families that does nothing for those struggling to pay their bills, we already have the RESP for that).

The throne speech also announces intentions to "begin work" to create a school of traditional Chinese medicine at a B.C. educational institution, which is neither here nor there (and not something one expects to find in a throne speech).

And this captures all new announcements in the whole 29 pages of the throne speech. The rest of the throne speech was merely an extension of the pre-election advertising you've already seen on TV or heard on the radio.

Despite much talk of diversifying the economy, this government's economic vision continues to be limited to resource extraction and export.

This is disappointing. Putting all our eggs in the natural gas basket is hardly the path to long-term, sustainable prosperity in the era of climate change (as Marc Lee argues here). There may be some short-run profits to be made, but at the expense of increased economic instability, as we jump on the roller-coaster of global commodity prices. Remember when falling gas prices resulted in lower than projected natural gas revenues for the B.C. government and thus a higher deficit and a real threat to important services last September?

Besides, corporations profiting from natural gas development and export is not a guarantee that British Columbians will prosper. After a decade of tax cuts, we're now taking in a very small share of corporate profits in corporate income tax: the provincial corporate tax rate is 10 per cent on paper, but we get less due to various tax credits and deductions, and the sector is actively lobbying for more (see here). In addition, our natural royalties seem to run at about 10-11 per cent of the revenues. In contrast, the Norwegian government retains roughly 85 per cent of the net revenues of its oil industry.

This may be why the throne speech prefers to focus on the billions of dollars invested than speculate on the actual benefit the province would receive, net of all tax credits, the state-provided infrastructure and subsidized hydro power.

And while natural gas may be the cleanest fossil fuel to burn, its extraction through fracking is dirtier than many realize. Just last week, Canada's federal Environmental Commissioner expressed concern about our lack of understanding of the toxicity of chemicals used in fracking specifically, and more generally worried that "environmental protection may not be keeping pace with resource development." Given that assessment, the throne speech's assurances that we have the most stringent environmental and safety regulations ring a little hollow.

As does the government's claim about being "determined to balance B.C.'s budget, year after year" given that since 2001 we've seen exactly one year of more or less balanced budget (2008/09), four sizable surpluses (over $2.5 billion each) in 2004/05 to 2007/08 and seven years of relatively large deficits. This is not to say that running a deficit is always wrong -- quite the contrary, there are times when deficits are the best policy a government can take. But it does mean that striving to balance the budget "year after year" does not make for very good public policy and should not be the goal.

Photo: BC Gov Photos/Flickr

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