B.C. Liberals' promise to not leave debt for our kids is 'misleading'
Great-grandchildren will be paying B.C.'s debts until at least 2094
At nearly every campaign stop, B.C. Liberal Leader Christy Clark tells her supporters her government will "make sure we don't leave our children with a debt."
But a CBC Fact Check shows that, according to economists, Clark's comments are misleading.
"Even if we are as charitable as possible to the underlying assumption the premier is making, it is untrue," said Rob Gillezeau, associate professor of economics at the University of Victoria and former chief economist for the federal NDP leader.
"The province has debt on the books. The fiscal plan has debt accumulation on the books, so there is no way that statement is going to be true," said Gillezeau.
B.C.'s overall provincial debt is forecast to hit $47 billion by 2020, according to public accounts. There's another $30 billion in debt when you count Crown corporations such as BC Hydro, and TI Corp. — what is known as self-supporting debt because they generate their own revenue.
But that is not the debt Clark is talking about.
"It's obviously debt that the public will face regardless. Whether it's directly under a corporation, it doesn't really matter for purposes of whether the public has debt. It's sheltered under a Crown corporation," said Gillezeau,
B.C.'s overall "high debt burden" and BC Hydro's growing liabilities prompted a warning of a possible downgrade by Moody's credit analysts in January.
"The anticipated increase in debt continues to pressure the province's rating, since it raises the contingent liability of British Columbia," said the report, which ultimately upheld the provinces AAA rating.
That rating affects how many tax dollars go to servicing the debt.
B.C.'s debt-to-GDP ratio, which measures the province's ability to pay its debts, is expected to stay relatively constant at 16 per cent, which is better than most provinces, according to a Royal Bank analysis.
Libs to pay 'operational debt' only
The B.C. Liberals' platform says they are only promising to pay off operating debt, a detail Clark often leaves out. That is the day to day costs of running hospitals, schools, and government services.
Even with operating debt paid, B.C.'s overall debt is forecast to balloon to $77.6 billion by 2020.
"We're thinking about the future, putting money aside for our children in a savings account, making the electricity supply our kids will need, building the infrastructure our kids will need, paying off the debt, so they don't have to, said Clark in defence of Site C on April 19.
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"She should say operating debt. It is incorrect to say there will be no debt. They are actually adding debt year after year. .. we're still going to have to pay that off, said Lindsay Tedds, associate professor, School of Public Administration, University of Victoria.
"The Liberals are totally spinning this one."
Tedds said the NDP is also promising to pay of the operating debt and Clark should specify she's not talking about overall debt every time she brings up the softened version of her old 2013 campaign slogan: "Debt Free B.C."
Grandchildren will pay Site C debt
BC Hydro is also expected to spend another $20 billion on infrastructure, adding to the provincial debt and has told the B.C. Utilities Commission it will take 70 years to pay off Site C, starting when it's built in 2024.
"It goes beyond our kids," said Tedds, pointing out that voters' children, grandchildren and even great-grandchildren could be paying for the taxpayer-funded project until 2094.
TI Corp, the Crown corporation created to build the $3.4-billion Port Mann Bridge and highway expansion, will also be borrowing to build a $3.5-billion bridge to replace the Massey Tunnel.
All that, plus BC Hydro's growing debt, could see the province carrying an estimated $97 billion in debt.
"This is debt for my kids and it is debt for her kids. That is debt that has to be paid off by future taxpayers," said Tedds
"Maybe there is an aspirational goal they are shooting for in the long run, but when Christy Clark is finished being premier, British Columbia will have debt," said Gillezeau.
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- A previous version of this story omitted the fact that Rob Gillezeau was also the chief economist for the federal NDP leader from 2011-2015.Apr 25, 2017 10:44 AM PT