RBC Financial Group's updated provincial economic forecast estimates that BC will achieve 3.0% growth in real GDP this year and 3.5% next year. That would be very good but the estimate for 2004 growth is still not as good as the 3.1% Gary Collins forecast for 2004 when he presented his first full budget in February 2002. Since then Collins has been busy revising his forecasts downward. Most economists don't like to be reminded of previous forecasts, their eye is always on the future rather than on past errors.

The graph illustrates growth in real GDP from 1992 through 2003. It exceeded 3.0% in 1993, 1997, 1999 and 2000. In 2001, the first year of the New Era, real GDP showed negative "growth" recovering to 2.4% in 2002 before falling back to 2.2% in 2003. Those who are amused by comparing yesterday's weather forecast to today's weather can get a few chuckles by comparing the actual growth numbers shown here to the forecasts of previous years. Economic forecasts come out more often than the actual results, with the consequence that optimistic forecasts can be used for propaganda purposes. Having failed to achieve its promised economic miracle, the Campbell government is heavily dependent on optimistic forecasts rather than actual results.

To its credit, the RBC Financial Group has been more accurate than many others with its forecasts for BC's economy. Prior to tabling the 2002 budget, its representative on the Economic Forecast Council predicted real growth in 2002 of 0.7% (actual was 2.4%). Prior to tabling the 2003 budget, its representative predicted real growth in 2003 of 2.1% (preliminary actual was 2.2%). Prior to tabling the 2004 budget, its representative predicted 2.9%, now increased to 3.0% in the latest RBC provincial update. It will be late April 2005 before the initial estimates for 2004 are available from Statistics Canada, and it will be late November 2005 (six months after the election) before final figures for 2004 are available.

One of the reasons given by the RBC for its optimism for BC included the province's relatively low debt-to-gross domestic product ratio. The Globe & Mail's "Report on Business" included a lengthy report on the recent RBC provincial forecasts in which it claimed that the forecast was optimistic because "the province now boasts Canada's second-lowest debt-to-gross domestic product ratio after Alberta." No where in the RBC report were the words "now boasts" used. That is because BC had the second lowest debt-to-GDP ratio under the NDP. The Campbell government ran the largest deficits in BC history with the result that the debt-to-GDP ratio increased from 21.8% when it took power to 26.8% this year.

Subtle distortion through the insertion of misleading words like "now boasts" is nothing compared to outright false information. During the debate on the Rafe Mair show last week, the Campbell apologist insisted that the NDP didn't really balance its budget. The audited financial statements are called the "Public Accounts"; they are found in archived publications on the Ministry of Finance's website under the section for the Comptroller General. The audited statements show a surplus of $52 million for 1999-2000, and for 2000-2001 they show a surplus of $1.5 billion. The first year of the New Era was fiscal 2001-2002. It had a deficit of $1.2 billion, which would have been more than twice as large except for a one time gain of $1.5 billion resulting from the change in pension arrangements. That bears repeating; the change in pension accounting benefited the results in the first year of the Campbell government. Campbell apologists also try to detract from the last two years of the NDP government, by claiming that they finished with surpluses only because they didn't use full generally accepted accounting principles (GAAP). The only substantial change needed to implement full GAAP at the end of the NDP's term was the inclusion of the SUCH sector, school districts, universities, colleges and institutes, and health-care organizations. The effect of including the SUCH sector in the 2004-05 budget was to improve the bottom line by $124 million. In other words, the last step in moving to full compliance with GAAP helped the government's financial statements. The last budget includes a table showing the effect of including SUCH in the financial statements from fiscal 2001-02 through fiscal 2006-07. In all of those years, the effect is helpful for the bottom line. It is reasonable to presume that the NDP surpluses would have been even greater if the SUCH sector had been included earlier. Laying out the facts is not likely to change the spin from Campbell apologists, but by using the links provided in this article those who are interested can go to the original sources in the Ministry of Finance and check out the facts.