OPINION: NDP losing the fight for fiscal credibility
Former Liberal finance minister calls NDP platform promises 'reckless and unfunded'
Week one of the provincial election campaign has laid out the broad stroke approaches the B.C. Liberals and NDP will take in their respective attempts to form government.
When determining which approach deserves support, one must consider the credibility issue.
The B.C. Liberals have largely maintained the fiscally responsible approach that has seen the government receive the highest possible credit rating by the big three credit rating agencies.
Why does this matter?
The government's credit rating determines the interest rate that is charged on government debt and today B.C. taxpayers benefit from paying the lowest possible rates. That means less must be spent on interest payments and more can be spent on important services.
B.C. also enjoys the lowest level of taxpayer-supported debt in relation to the size of our economy at 15.9 per cent. Ontario is over 40 per cent and Quebec almost 50 per cent. Canada is 30 per cent.
These rating agencies care little about politics or politicians. They focus only on results or the lack thereof. They are great independent validators.
That's why the slew of NDP promises in the opening week of the campaign is so worrisome. They are undermining their credibility with a number of reckless and unfunded promises.
Take the tolling issue. The B.C. Liberals say they will cap bridge tolls and limit commuters to a maximum of $500 per year, at an annual cost to government of $30 million.
Not to be outdone, the NDP say they'll eliminate the tolls altogether and fund the resulting $200 million per year in lost revenues by raiding the LNG prosperity fund. That will cover just over two years of lost revenue. They don't say where the rest will come from.
Worse still, their promise goes against environmental best practices. Tolls are a demand management tool and price in some of the cost of driving. Why eliminate driving tolls and not transit tolls (which we call fares)? This makes no sense.
The NDP also promises to eliminate MSP premiums, but they don't account for the $1.7 billion in lost revenues. The B.C. Liberals have said they'll aim to eliminate MSP premiums, but will only go forward if economic growth is higher than they've projected.
The NDP go on to say they'll freeze ICBC and BC Hydro rates, but once again don't account for the cost of these commitments. And they talk about providing a $400 yearly credit to renters, but at the time of their announcement the NDP was unable to say how many rental units this would apply to, nor what the costs of this program would be.
They do say they'll find $680 million in "savings" without identifying where those savings will come from. Given they have opposed every single cost management initiative the B.C. Liberals brought in to balance the budget, this again strains credulity.
Ultimately, there is no free ride. Most of the public understands this.
The B.C. Liberals are not a perfect government — and I have yet to discover one — but their fiscal credibility has been hard won.
The NDP has yet to demonstrate it can earn voters' trust in this key area.
Kevin Falcon is a former B.C. Liberal deputy premier and minister of finance.
- This story has been updated to more accurately reflect the B.C. Liberals plan for MSP premiums.Apr 20, 2017 1:38 PM PT