The B.C. Liberals like to say they’re good with money. They said it on the side of their campaign bus and they have spent millions on taxpayer-funded ads that repeat that message. They have also claimed that their core review is all about curbing government spending.
But a look at their books tells a very different story.
Leave aside, for the moment, that the 2014 provincial budget was balanced through a combination of hidden taxes and dipping into the pockets of B.C. Hydro and other Crown corporations. Let’s also ignore that we are heading for a record $70 billion of debt by 2016.
We only have to look closely at the budget to see a story of complete incompetence and financial mismanagement on government capital projects. But this isn’t what is going under the microscope in the government’s core review. Instead, that review will ignore billions in overruns to focus instead on attacking important regulatory bodies like the Agricultural Land Commission and the B.C. Utilities Commission.
The B.C. Liberals will tell you that spending on capital projects is essential and I agree. It is critical to build public facilities and infrastructure in health care, education, transportation and elsewhere to ensure our province can meet people’s needs.
It is also true that building infrastructure is an important job creator. The problem comes when the government does such a shoddy job of overseeing these projects that they go billions of dollars over budget.
In order to get the best value for taxpayers’ dollars, the government’s capital spending needs to be fair and transparent. But the B.C. Liberals have failed on this front in too many cases.
The B.C. Auditor General has frequently reported on the lack of solid business plans, poor record keeping and contract monitoring for capital projects.
The B.C. Construction Association has said that audits have shown that concerns held by industry about the lack of fair, open, competitive and transparent procurement are justified in many cases and that these deficiencies are putting billions of taxpayer dollars at risk.
Five key projects originally estimated to cost $3.5 billion in total ended up costing taxpayers $6.6 billion. The Northwest Transmission Line went from $404 million to $746 million, the South Fraser Perimeter Road from $800 million to $1.26 billion, the Port Mann project went from $1.5 billion to $3.3 billion, the Vancouver Convention Centre from $495 million to $836 million, and the B.C. Place roof from $365 million to $514 million. All together, these add up to a shocking final overrun on capital projects of $3.1 billion.
Major projects often come with cost overruns of 10 to 20 per cent, which can be sufficiently explained by unexpected increases in labour or materials. When the overruns are closer to 100 per cent there is little justification.
The impact of the government’s financial mismanagement on British Columbia families and taxpayers is significant. That squandered $3.1 billion could be building necessary light-rail transit in Surrey or a SkyTrain line to the University of B.C. It could also have made a difference in upgrading St. Paul’s Hospital or a range of other essential capital projects. None of that will occur today.
It will cost the government $122 million every year to pay the carrying charges on this $3.1-billion overrun. This is money that would put 1,200 nurses to work, hire 1,600 teachers, 2,000 care aides for seniors or provide 10,000 skills training seats in our colleges and institutes. Instead, it will go to pay for Liberal government ineptness.
This is more than a series of isolated errors. It is a pattern that points to a serious lack of government oversight on key capital projects. It is a problem that needs to be corrected.
Rather than cutting the budgets of regulatory bodies charged with protecting the interests of British Columbians, the premier should direct the core review to examine how the government’s gross mismanagement on the capital side occurred and ensure it ends.
Shane Simpson is the New Democrat Core Review Critic.
The article originally appeared in the Province: http://blogs.theprovince.com/2014/03/10/shane-simpson-liberal-mismanagement-is-b-c-s-biggest-fiscal-problem/