B.C.'s budget has too much 'padding' report says, urging more spending on social programs

A new report says B.C. has too much "fiscal padding" in the budget -- and that money needs to be spent.

'Flush with Cash' shows most provinces have unallocated funds in their budgets, money the Canadian Centre for Policy Alternatives thinks should be used to make public investments in social programs. 

Alex Hemingway, a senior economist with the CCPA crunched the numbers from B.C.'s latest fiscal update. He found the budget has $6 billion dollars socked away in contingencies and rainy day funds.

He is calling on the government to spend more to deal with things like housing, the overdose emergency and climate crisis.

"When we're chronically under-investing that's going to lead to more climate damage in the long-term," he told CTV News in an interview.

He points to last year's budget, where a nearly $10 billion deficit forecast at the beginning of the year turned into a $1.3 billion surplus. At last count, this year B.C. was on track to post a $700 million dollar surplus. 

For years, B.C. governments have said spending must be controlled ,in part, to ensure credit ratings remain high, which affects the government's borrowing costs.

Peter Milobar, the BC Liberals' finance critic said the surpluses show taxes are too high.

"When you're continually running surpluses while still getting record levels of taxation levels coming in -- you know they need to make those adjustments to put money back into people's pockets," he said at the legislature Wednesday.

Finance Minister Selina Robinson says money is being spent on social programs like child care, and housing. She added billions of dollars are being allocated from this year's budget to help lower-income British Columbians with inflation, fund a new deal with doctors, and address other urgent other priorities. Money is also set aside in case of natural disasters, or an economic downturn, she added.

"We've always been committed to spending these dollars on British Columbians so that the services are there for them when they need it," she said.

Robinson said recently there have been extra dollars set aside to deal with the pandemic and she expects things to level out in the coming years.

The BC Liberals, when in government were also accused of padding the budget to lower expectations, and then coming up with a "good news" surplus by year end. That's a tradition the NDP seem to have followed.

"This pattern of lowballing has played out over the past two decades in just about every budget with a few exceptions," added Hemingway.

The reason Hemingway says that's important to discuss -- is because accounting principles dictate that whatever money isn't spent by year end can't be used in the next budget year.