B.C. debt: A brief history by Will McMartin
One of the central reasons British Columbia joined Confederation in 1871 was
because Canada was willing to assume our entire colonial debt. In excess of one
million dollars, it posed a challenging burden for the approximately 10,000
whites, 2,000 Chinese, and 28,000 Indians or more who comprised British
Columbia’s population.
(The debt was incurred mostly for construction of the Cariboo Wagon Road,
which linked the goldfields at Barkerville to Yale. From Yale, steamboats ran
down the Fraser River to New Westminster and across the Strait of Georgia to
Victoria, and south to San Francisco.)
Debt-free ever so briefly following our admission to Canada, British Columbia
quickly began borrowing monies to cover the yearly shortfalls between provincial
revenues and expenditures. In 1874, three years after entering Confederation,
the new province’s net debt totalled more than $189,000. By 1888 it had
surpassed $1 million, and in 1895, $5 million.
In 1903, the year that political parties first made their appearance in
provincial politics, B.C.’s net debt exceeded $10 million. Thereafter
governments of varying stripes contributed to British Columbia’s mounting debt:
the Conservatives, elected in 1903, left office in 1916 with the net debt close
to $18 million; when their successors, the Liberals, were defeated in 1928, that
figure had climbed to more than $85 million.
Returned to government in 1928, the Conservatives were overwhelmed by the
Great Depression and defeated by voters in 1933 with the province’s net debt
totalling $131 million. The newly-restored Liberal administration rode out the
balance of the Depression before making way in 1941 for a Liberal-Conservative
Coalition; at that time the province’s net debt was $148 million.
After declining for a few brief years during the Second World War, B.C.’s
debt exploded in the expansionary post-war period. By 1952, when the
Liberal-Conservative Coalition was succeeded by a new Social Credit government,
the province’s net debt had sky-rocketed to $222 million.
W.A.C. Bennett’s hucksterism
Seven years after taking office, premier W.A.C. Bennett held a
well-publicized bond-burning ceremony on Lake Okanagan at Kelowna to celebrate
B.C.’s freedom from debt. The festivities were a sham, however; Bennett merely
had shifted Victoria’s financial obligations to newly-created Crown corporations
and other government agencies as ‘contingent liabilities.’
Bennett sought two objectives with his 1959 huckersterism: first, to gain
voter approval for Socred fiscal policies; and, second, to shield the fact that
B.C. was borrowing enormous amounts of money to finance massive infrastructure
development (highways, tunnels, bridges, schools and hospitals). In 1960, B.C.’s
official net debt was recorded as ‘zero’, but contingent liabilities stood in
excess of $555 million.
By the mid-1960s, B.C.’s contingent liabilities had surpassed the $1 billion
mark, and in 1972, when W.A.C. Bennett’s Socreds were defeated after two decades
in government, British Columbia owed more than $2.7 billion. Led by Dave
Barrett, B.C.’s first New Democratic Party government lasted a single term, and
left office with the debt close to $4.5 billion.
Recent NDP nearly doubled debt
Returned to government under Bill Bennett, W.A.C.’s son, Social Credit
politicians blasted the NDP for fiscal incompetence and promised strict economy.
Yet B.C.’s debt roared past the $10 billion mark in 1982, and exceeded $17
billion when Bill Bennett’s successor, Bill Vander Zalm, resigned his office in
disgrace in 1991.
Under the NDP governments of the 1990s, led first by Mike Harcourt, later by
Glen Clark and lastly by Ujjal Dosanjh, British Columbia’s debt nearly doubled
to more than $33 billion.
From ‘zero’ in 1871, British Columbia’s debt today exceeds $37.3 billion.
Since the arrival of party politics in B.C. a century ago, not a single
government -- Conservative, Liberal, Social Credit, or NDP -- has left office
with the provincial debt lower than when it first took power.
This historic fact does little to discourage B.C. politicians from vowing to
be fiscally prudent, and even making vague promises to ‘reduce the debt.’
Recently, NDP leader Carole James attended a meeting with the Coalition of B.C.
Businesses, and in response to a question concerning debt-reduction she replied:
"Every year there will be a balanced budget."
Sure.
Headed for $40 billion
Meanwhile, free from criticism by the news media, business community or
political opposition, Gordon Campbell and his Liberals repeatedly extol their
alleged ‘success’ in managing B.C.’s finances. Despite reams of statistical
evidence to the contrary, these assertions largely go unchallenged.
In May 2005, eight months from now, B.C. voters will go to the polls in a
general election. Not long thereafter, regardless of which party wins the
contest, B.C.’s debt will surpass the $40 billion mark.
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