British Columbia’s semi-annual report and our health expenses

Posted in Politics on November 30th, 2003 by Sacha Peter

Everybody living in British Columbia should be reading the BC Government webpage every week or two just to read the headlines. In my opinion, it’s more important to read the government press releases on their site before you read the subsequent analysis they get by the media and opposition parties. Of course, the material written by the government is going to be biased in their favour, but the important thing to realize is that there’s a lot more going on in the government than the scandals that you read from Vaughn Palmer in the Vancouver Sun’s politics section.

The most important reports typically come from the ministry of finance. They released their semi-annual report on the province’s finances. The information published here is significant since it tells you where your tax dollars are going. Specifically, on page 41 we have table A.7 which indicates where the spending is going by the government function. We see the following forecasts for the fiscal year (which will end March 2004). Note that the population of British Columbia is approximately 4.2 million people.

  • Total expenses: $28.3B spent ($6738 per person)
  • Total revenues: $26.4B received (93% of expenses, $6286 per person)
  • Health: $11.0B (39%, $2619 per person)
  • Education: $6.9B (24%, $1651 per person)
  • Social Services: $2.8B (10%, $676 per person)So this leaves about 27% left of the expenditures for things such as our roads, courts and other such trivial things that obviously don’t have as much priority as they do over health, education and social services. Just think about this for a moment. We’re spending 41 cents on every dollar that we collect in this province in healthcare. Is this money that people (most of whom stay out of hospitals) really should be paying whether they use the services or not?

    The problem is that most people think healthcare is free. It isn’t. Somebody has to pay, and the taxpayers, i.e. those of us that actually buy provincially taxable merchandise and earn more than $8200/year, have to pay. The users that actually use the system to get a free ride, however, don’t actually incur any of the financial pain of having to utilize healthcare services. There has to be more linkage between the actual costs of healthcare and the people that come into the hospitals.

    That aside, the province is forecasting a $2.3B deficit for the fiscal year. I think this number is garbage since it’s perfectly obvious to anybody that can read these documents that they’re lowballing the number with low projected growth rates – the US economy is going to take BC’s economy with it to the roof in 2004. Some paper-napkin calculations show that the actual deficit should come in around $1.6B, which should make it easier for the government to prepare the public for the shock announcement that they’ll be balancing the budget the following year. Just in time for the 2005 election.

    Despite having being savaged by the NDP goverment for 1991-2001, BC’s economy hasn’t been damaged beyond repair. We’re still in quite good shape (our debt-to-GDP is roughly 28%, depending on what numbers you want to believe) and our debt coverage (revenues to interest payments) is still at 6% on a $39B provincial debt. Hopefully after they’ve finished balancing the budget, the government will maintain their discipline and start cutting taxes further and getting the debt figure down to something more reasonable, such as 10-15% of GDP. Once we do that, people are going to have trouble telling the difference whether Beijing or Vancouver is growing faster by the time that the 2010 Olympics start.

    If I was giving the provincial government a report card grade in terms of fiscal responsibility, it would be a “B”. They inherited a mess, but it should be looking better in the future.

    • This entry was posted on Sunday, November 30th, 2003 and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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