Go back a decade and one of business leaders’ biggest asks of politicians was that governments balance their budgets.
Times have changed and today, industry’s main request of candidates vying for provincial office is that they take measures to grow ÎÚÑ»´«Ã½’s economy, encourage corporate investment into the province and speed up government approval processes.
The latter largely means chopping much of the bureaucratic back-and-forth that can mire large projects in limbo for years if not more than a decade.
The ask also includes incentives for business owners to invest in new equipment so workers can increase their productivity without working longer hours.
ÎÚÑ»´«Ã½ Finance Minister Katrine Conroy earlier this year tabled the province’s second consecutive record deficit of $7.8 billion for the 2024-25 fiscal year. She then updated her assessment and said that shortfall was likely to reach $8.9 billion.
Deficits of $6.7 billion in the 2025-26 fiscal year and $6.1 billion in the 2026-27 fiscal year are slated to follow, she said Sept. 10.
Carole Taylor, who was ÎÚÑ»´«Ã½’s finance minister between 2005 and 2008 under a BC Liberal government, told BIV that she is concerned about the trend of politicians not balancing budgets.
“I remember how hard it was to turn the ship around,” she said, referring to work done under former prime minister Jean Chrétien in the 1990s to slay what were large deficits under the Brian Mulroney administration.
“Both federally and provincially, we’re headed into deep waters, and whoever comes in—whether it’s still [Premier] David Eby [in Victoria] or whether it’s still [Prime Minister Justin] Trudeau [in Ottawa], whomever is there is going to have to start doing the hard stuff, and that’s never popular, and nobody wants to do it, so it’s often left to a future government.”
ÎÚÑ»´«Ã½ used to have legislation that required governments to run balanced budgets during four-year cycles, but the BC NDP government’s Economic Stabilization Act suspended that law in 2020.
Hours before Conroy announced her revised budget expectations, seven business leaders held a joint press conference to highlight what they want from whichever party forms the next provincial government.
None said the words “balanced budget” until BIV asked them if this was a priority.
“There is a lot of concern about the path we’re on,” said Greater Vancouver Board of Trade president and CEO Bridgitte Anderson.
The board in the 1990s created a debt clock that tracked federal government debt and ticked higher with each passing second, until the federal government in 1998 tabled a balanced budget (even though the federal debt continued to rise).
Anderson told BIV that she does not know where that clock is now.
“It was a very useful tool, and we were very excited when we got to retire that,” she said. “It might be time to bring it back.”
Efficiency in the economy is the key to wealth
British Columbia Business Council CEO Laura Jones’ message for politicians is that the economy needs to be government’s top priority.
A strong economy, she stressed, is the foundation for strong communities as it helps create higher-paying jobs.
It enables neighbourhood restaurants and retailers to thrive and generate tax revenue that the province can invest in health care, education and cleaner technologies that are less burdensome on the environment, she said.
Jones’ concern with this year’s record provincial deficit is that it is structural, meaning it cannot be eliminated without drastic measures.
“The best way to get out of [a structural deficit] is to stimulate economic growth and to have higher growth levels,” she said. “The painful way to get out is to have to start cutting, but we do know that today’s deficits are tomorrow’s taxes.”
High deficits and runaway debt can cause credit-rating agencies to downgrade a province’s credit worthiness. S&P Global Ratings in April lowered its longer-term issuer credit and senior unsecured debt ratings for ÎÚÑ»´«Ã½ to AA- from AA. Moody’s that same month kept its AA1 baseline credit assessment for the province but downgraded its outlook for ÎÚÑ»´«Ã½ to negative from stable.
Jones said the easy ways government can encourage investment and help businesses be more productive are to:
- Provide a regulatory environment where investors know what to expect;
- Create reliable timelines for when permitting and approvals for projects will be completed; and
- Focus on how to reduce global greenhouse gas emissions instead of how to reduce domestic emissions.
Encouraging liquefied natural gas (LNG) projects in ÎÚÑ»´«Ã½ could be one way to bolster the province’s economy while also helping to reduce global carbon emissions, she said, as LNG is a cleaner energy source than coal, which remains in use elsewhere in the world.
BC Conservatives leader John Rustad said he is open to ending the province’s ban on another form of clean energy: Nuclear power. It would remain to be seen whether there is corporate interest in building a nuclear power plant as it is unlikely the provincial government would finance one on its own.
Rustad has also said he wants to repeal ÎÚÑ»´«Ã½’s carbon tax. Eby said he also supports getting rid of the tax if the federal government removes its requirement that all provinces have one.
BC Green Party leader Sonia Furstenau said in a statement that she wants to “fix the carbon tax, make it fair,” but has not gone into details.
Jones said there are “many roads to roam” on how the government could make the economy more productive.
Textbooks might hold that cutting taxes stimulates spending and that would give small business owners needed capital to invest in new equipment that would make workers more productive when working the same number of hours—something that would ultimately help increase the province’s GDP per capita.
A problem with that approach is the immediate impact of lower taxes could be to push the budget deficit even higher, Jones said.
Red tape and delays deter investment
Mining Association of BC CEO Michael Goehring said his members are frustrated with how long it takes government to approve projects in ÎÚÑ»´«Ã½
This is important, he said, because cumbersome processes deter corporate entities from investing their capital in the province.
“The reputation of permitting and authorizations in ÎÚÑ»´«Ã½ is that it’s extremely difficult to get things done,” Goehring said.
The province has a wealth of minerals and other resources and there are about 17 proposed projects that plan to potentially unearth those commodities, but getting a new mine approved can take 12 to 15 years, he said.
“It only took eight years to put a person on the moon,” said Goehring.
Proponents, he said, find themselves punted back and forth between government departments, such as the Ministry of Energy, Mines and Low Carbon Innovation, the Ministry of Environment and Climate Change and the Ministry of Water, Land and Resource Stewardship.
“They are highly siloed,” he said. “The process goes back and forth, and then you have a First Nations process as well.”
Long government approval processes and requirements have scuttled ski resort proposals, such as Jumbo in the Kootenays.
Dithering governments have also delayed critical infrastructure projects, said Chris Gardner, president of the Independent Contractors and Businesses Association, which has endorsed the BC Conservatives.
“When we do decide to make the decision, what’s happening is the costs are coming in wildly over budget, and the projects are years delayed,” he said.
“We’re getting little, and it’s being delivered far too late. Look no further than the Massey Tunnel—a decade behind schedule, at double the budget—or the Cowichan Hospital, which is three years late and double the budget.”
Other delays include the 16-kilometre Skytrain extension to Langley from Surrey, now expected to cost $6 billion, up from $4 billion.
The Broadway subway’s completion has been delayed multiple times, with its estimated cost rising to $2.6 billion from an original $2.14 billion estimate.
“The government’s procurement model is deeply flawed and badly broken, and as a result we are all paying a very, very heavy cost,” Gardner said.
BIV asked the NDP what Eby and his team would do to speed up permitting and approval processes but did not get an official response. A representative told BIV that he was not yet able to share platform details.
Furstenau said that her approach is to think of what she wants to accomplish and work backwards to find the solution. She did not provide any specific policy changes.
“Government needs to get out of the way, with all these layers of bureaucracy,” Rustad told BIV.
“There’s a significant legislative review that’s needed to strip out all the layers of permitting and get down to a single permit for a single project.”
He said it is “crazy” to have a situation where a project needs 15 permits, with the first 14 coming back positive and the proponent failing to get the go-ahead because of a rejection of a 15th permit.
“That’s going to be a big focus within our government—to clean all that up,” he said.
