won't find one person who anticipated the decoupling of natural
gas revenues from oil revenues." That is what Gordon
Campbell said today in a media scrum recorded by Sean Holman
of Public Eye Online, where you can hear
the entire scrum. Unfortunately for the Premier, a simple
search on Google for relationship, disconnect or divergence
between oil prices and natural gas prices reveals studies
and discussions going back five years or more about the decoupling.
scrum showed Campbell on the run from media questions asking
what and when did he know about the declining state of the
province's finances. During the budget lockup the previous
British Columbia's Jim Beatty asked Finance Minister Colin
Hansen when he learned that revenues were under pressure and,
to everyone's surprise, Hansen said he learned during the
election. That didn't stop them from campaigning with the
promise that the deficit wouldn't go a dollar over $495 million,
even though they knew better. It would be interesting to hear
what they consider the "election period" to be since
they tried to pass a gag law that would have taken effect
starting in December.
I wrote about the increase in the welfare caseload and the
drop in construction employment. On February
15th, two days before the pre-election budget was released,
statistics for November 2008 were released late in the
afternoon of New Year's Eve. Those statistics showed the
number of cases classified as "temporary assistance
expected to work" up 24.3% in November 2008 relative
to November 2007. The statistics for December show the expected
to work cases up by 30.0%, from 19,708 in December 2007
to 25,609 in December 2008. That is a human tragedy, and
it is a source of "cost pressure" that has to
be watched in Tuesday's budget documents.
government has the benefit of daily statistics on its tax
collections to help it forecast how revenues are doing relative
to forecasts, but it will not share that level of useful
information with the public.
wasn't the only one pointing to the challenges facing B.C.'s
economy. On February 5, 2009 Central 1 Credit Union's Economics
B.C. Weekly Briefing carried a headline "Latest
Indicators Confirm Recession" and said: "The economic
recession both nationally and in British Columbia deepened
during January and is accelerating." On February
27th the Briefing said: "It was another week
of uniformly negative economic indicators, with no floor to
the unfolding recession in sight."
is why it is impossible to believe that Campbell and Hansen
were taken by surprise and didn't know that their pre-election
budget figures couldn't hold water.
budget update was accompanied by a slide
show containing several graphs which further undermine
the credibility of Campbell and Hansen. Those graphics show
a 9.6% decrease in retail activity between September 2008
and March 2009, a 61% decrease in housing starts between September
2008 and June 2009 and a 78% decline in natural gas prices
between June 2008 and July 2009. Enough of those data were
available and the start of the downturn certainly was sufficiently
clear so most economists knew that the B.C. economy and government
finances were in trouble.
are several ways to describe what Campbell and Hansen said
before and after the election, including 1) they misled voters,
2) they were incompetent, or 3) they were willfully ignorant
- a concept big in the Nixon era. Whatever the explanation
may be, one thing is clear: they likely would have lost the
election if voters had known the truth.