Skip to main content

“I am a Canadian, free to speak without fear, free to worship in my own way, free to stand for what I think right, free to oppose what I believe wrong, or free to choose those who shall govern my country. This heritage of freedom I pledge to uphold for myself and all mankind.” ~~ John G. Diefenbaker

Twenty-seven percent of BCs Provincial Debt is at the mercy of whatever fluctuating interest rates end up at!



This weekend the BC Liberals are meeting in Vancouver, and by all accounts, it's living up to the expectations of a being a Rah-Rah-Rah cheerleading session, leading into next May's general election.  Much of the focus of course is on the economy, with a claim to be leading in Canada ... as well as a claim to be "Spending within our means".

On the claim of "Spending within our means" alone Christy Clark is proudly telling British Columbians that:

Alone in Canada, your BC Liberal government has achieved four
balanced budgets in a row, with a fifth on the way. That’s how BC has
maintained its highest-possible triple-AAA credit rating.

These economic achievements are important because of what they allow us
to do. Every penny we don't spend in interest charges can be invested in
British Columbians and the hospitals, schools, and services we all depend on.

And thanks to this fiscal discipline, BC is on track to be operating
debt-free as early as 2020, for the first time since 1975.


SO ... what is the difference between Debt and Deficit ... at least according the Ministry of Finance?    

Debtrepresents the money borrowed from lenders for a variety of reasons ...
the province pays interest for the use of the money it borrows and is obligated to repay it at a set date as determined by the terms of the debt instrument...

Deficitan excess of expense over revenue. The annual deficit is the amount by which the total annual operating expenses for the year exceed total annual revenues. The accumulated deficit is the sum of all deficits and surpluses incurred ... also represents the amount by which the total liabilities of the province exceed its total assets...


Ministry of Finance Provincial Debt Summary (First Quarter Results)

Estimated debt for 2016 / 17:   $67,690,000,000
  • Cost to service debt:  3.3 cents / dollar ($2.23 BILLION)

Estimated debt for 2017 / 18:   $69,886,000,000 (an increase of $2.2 BILLION)
  • Cost to service debt:  3.5 cents / dollar ($2.45 BILLION)

Estimated debt for 2018 / 19:   $71,891,000,000 (an increase of $2 BILLION)
  • Cost to service debt:  3.6 cents / dollar ($2.88 BILLION)


Why should these figures be of concern to us ... other than the fact debt continues to increase at an alarming rate?  Well the BC Provincial Debt Profile also shows us that 27% of our provincial debt is at a floating rate.

Twenty-seven percent of our debt is at the mercy of whatever fluctuating interest rates end up at! 

The good news or silver lining, is at least up to this point, is that the Bank of Canada left its benchmark overnight rate unchanged at 0.5 percent at its October 2016 meeting.  That, according to economists, shouldn't be cause to not be concerned about the future.


In a Globe and Mail story from September 23rd, Jason Wang (TransUnion director of research and industry analysis in Canada) stated that: “Many consumers do understand, but unfortunately some consumers have, in the last few years, developed a false sense of security, thinking that low rates are going to be here forever”.

It went on to quote Scott Hannah, president and chief executive officer of the non-profit Credit Counselling Societies concerns that people at risk might not take action soon enough as interest rates start to go back up.  “The increase is coming. It’s how you prepare yourself for that increase. Now is the time to get prepared”.

Should not the concerns of debt load on consumers, not also carry over to our provincial government?

Even with the governments claim they are balancing the budget, and even expecting there will be budget surpluses, DEBT CONTINUES to climb!  How does that square with Christy Clark's claim to be, "Spending within our means"?

Over the next three years the BC Liberals will be adding 7.56 Billion dollars just in costs to service the debt alone -- that's on top of the billions in increased debt!

All I can say is that even someone with a rudimentary knowledge of math skills, can see that's a claim that flies out the window, with just a cursory look at the facts.

In Kamloops, I'm Alan Forseth.

Comments

Popular posts from this blog

It seems the call for blood donors is being responded to, however ... “This effort is a marathon, not a sprint” says Canadian Blood Services

A week and a half ago I wrote the commentary ... “ While the national inventory is currently strong, an increase in blood donor cancellations is a warning sign of potential challenges to maintaining a health inventory of blood ” It was written as a result of talk about a potential blood shortage that would occur if people stopped donating due to the COVID-19 virus. It seems the call to Canadians was responded to, however, as I was told this afternoon ... “ T his effort is a marathon, not a sprint ”. As it now stands now, donors are able to attend clinics which are held in Vancouver (2), Victoria, Surrey, and in Kelowna, so I asked if there any plans to re-establish traveling clinics to others communities - for example in Kamloops, Prince George, Prince Rupert, Revelstoke or Cranbrook, and perhaps further north at perhaps Ft. St. John? According to Communications Lead Regional Public Affairs Specialist Marcelo Dominguez, Canadian Blood Services is still on

FEDLSTED -- Rules will have to relax-- the question is how and when

The media has created a fervour over the mathematical models that allegedly help governments predict the future of Coronavirus infections in the general population. Mathematical modelling has limited use and value. We need to understand is that the data available on Coronavirus (COVID-19) infections in Canada is far too small for statistical reliability. The data available for the whole world is useless due to variables in how nations responded to Coronavirus infections. There is no commonality in steps taken to combat virus spread and no similarity in the age demographics of world nations, so the numbers you see on the daily tracking of world infections are not useful in developing a model of infection rates that can be relied on. Mathematical models of the future spread of Coronavirus are better than nothing, but not a whole lot better.  Mathematical models must include assumptions on virus spreads, and various factors involved. As they are used in projections, a small erro

When necessary – and only when necessary – the Family Maintenance Enforcement Program can attach (garnish) wages

Alan Forseth ~~ Kamloops, BC ~~ May 15th Earlier this week (Monday May 13 th ) the BC government announced it would be establishing a new Crown agency to oversee the Family Maintenance Enforcement Program (FMEP).   They indicated that on or before the end of October, the provision of family maintenance services would transition from a contracted service provider, to the newly created Crown agency. Apparently, this was to ensure that family maintenance enforcement services for vulnerable British Columbians continue uninterrupted. Seeing this story, reminded me of a woman ( we’ll call her Mary Brown ) who had email me some time b ack about this very thing, and questions she had about how maintenance enforcement was imposed and enforced. She said to me, “ I’m just curious if you can get any statistics of the homeless men and woman, that have children, that they are paying family maintenance in support of their children”.  “I am not about to sugg

Labels

Show more