Commentary
By Ben Eisen

The British Columbia legislature will reconvene next month, and according to its latest budget, the government will run deficits of approximately $10 billion over the next three years, and its debt burden will roughly double.

These eye-popping numbers have received a lot of attention. Somewhat less attention has been paid to their underlying cause, which is that the Eby government plans to continue the binge of reckless spending that's caused the deficit problem in the first place.

Let's dig into the spending numbers. In 2019/20, program spending (all spending aside from debt interest) was $56.3 billion. This fiscal year, that number will reach a projected $89.9 billion. That's a 59.6 per cent spending increase in six years.

Of course, some of this spending growth is due to cost pressures from a growing population and inflation. However, even after we adjust for these factors, spending growth has been rapid. Inflation-adjusted per-person spending has increased by 18.3 per cent during this period.

Some may blame the pandemic for this increase, but this doesn't hold up to scrutiny. Onetime pandemic-related spending has been wound down entirely, and inflation-adjusted per-person spending is higher now than in 2020 or 2021.

Again, this spending growth is the clear cause of B.C.'s current fiscal freefall. In fact, if the government had merely held spending growth to the rate necessary to offset cost pressure from inflation-plus-population growth since 2019, program spending would be $13.9 billion lower today than is in fact the case. That's more than enough to cover this year's forecasted $10.9 billion deficit.

Put another way, if instead of engaging in a historically rapid spending surge, the government had held spending growth to the rate necessary to offset cost pressure from inflation-plus-population growth since 2019, it could afford to provide $3 billion in badly needed tax relief this year while maintaining a balanced operating budget.

Unfortunately, the Eby government plans to maintain the current elevated spending levels for the foreseeable future. And according to the budget, the government will not likely reduce inflation-adjusted per-person spending over the next three years. The elevated and unaffordable spending levels that have emerged in recent years are here to stay.

The government's refusal to reduce spending from today's historical levels will mean red ink for the foreseeable future. The finance minister has defended the fiscal plan by saying it puts the province on a "path towards balance across multiple budgets." However, the budget itself shows precious little progress in this direction, with the deficit on track to still be at $9.9 billion three years from now.

Finally, the government's strategy of trying to shrink the deficit very slowly by reducing the rate of spending growth from what has prevailed in recent years is inadequate in the face of B.C.'s debt explosion. The government can only make real headway on shrinking the deficit and preventing the forecasted growth in government debt by reversing the spending growth of recent years.

It's important that the cause of the problem is widely understood. Increased spending is the reason big deficits have emerged, and reversing the spending growth is the only way the Eby government can contain the debt explosion.