rabble blogs are the personal pages of some of Canada's most insightful progressive activists and commentators. All opinions belong to the writer; however, writers are expected to adhere to our guidelines. We welcome new bloggers -- contact us for details.

The staggering future costs of the B.C. government's contracts

B.C. Finance Minister Kevin Falcon.

As usual, there has been quite a hubbub surrounding last week's release of British Columbia's Public Accounts.

The provincial auditor says the provincial deficit is $520 million more than the government admits. And then there is the Auditor General's review of finances at the legislature that found "substantial irregularities."

But all of the above is pocket change compared to the staggering increase of the province's contractual obligations over the last six years. Normally, the government focuses on debt as a measure of its financial performance. In 2005/06, however, at the urging of the Auditor General, they began to publish numbers for their largest future contract obligations as well as debt. The Public Accounts describe it this way:

The government has entered into a number of multiple-year agreements for the delivery of service and the construction of assets. The following table presents the minimum amounts required to satisfy contractual obligations that are greater than $50 million, by sector, by year.

In 2005/06 those future contract obligations came to $34.013 billion. That year total debt for the province came to $34.356 billion. The province's future obligations totalled $68.4 billion.

This year's Public Accounts show those contractual obligations have increased by nearly 300 per cent since 2005/06. The contractual obligations reported for 2011/12 come to $96.374 billion. The provincial debt figure reported this year is $50.193 billion. The combined total is more than $146 billion. Since 2005/06, the future obligations for B.C.'s taxpayers have more than doubled.

How did we triple our contractual obligations in six years? The lion's share is to pay for private power contracts. In 2005/06 these obligations amounted to $13.4 billion. This year it has risen to $54.9 billion. That is more than half of all of our future contractual obligations. It is more than our total provincial debt. I leave it to others better informed than I to comment on whether betting all our chips on private power at this cost is a good idea (see here and here).

Looking forward on a year-by-year basis, the government says we will spend $8.4 billion to meet these contractual obligations in 2013. The figure falls to $4.8 billion in 2014 and in future years (up to 2017) averages $3.5 billion.

There is no question that a government needs to pay attention to its debt. But these contracts stretch decades into the future and we will have to pay for them. They look like debt to me.

The government now publishes details on these contractual obligations. You can find it at http://www.fin.gov.bc.ca/ocg/pa/11_12/Contractual_Obligations.pdf. I have spelled out the URL here rather than adding a link because by changing the date for the year you can look at earlier examples.

This article was first posted on Policy Note.

Photo: BC Gov Photos/Flickr

Thank you for reading this story…

More people are reading rabble.ca than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable.

rabble.ca has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.

Comments

We welcome your comments! rabble.ca embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on rabble.ca and your privacy here. Please keep in mind:

Do

  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.

Don't

  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.