11%

What budget approach is best for all
British Columbians?

There is much public debate in British
Columbia and across North America
about the best way for governments to
control spending and balance budgets.

One view holds that deep spending cuts must be
mide because we can no longer afford the health
care, education ind social safety net programs that
British Columbians count an. This view includes
the notion that dramatically restricting the role and
responsibilities of government and cutting taxes to
corporations is effective social and economic policy.

The BC government believes that budgets should:

be balanced through a combination of culling
waste and duplication, protecting health care and
education ind promoting cconcimi¢ growth. It is
this approach that the provincial government has
taken to balance BC's budget this year.

Investing for success

The BC government also believes we nust
continue to invest in projects uhatare essential to
our economic growth and success. For example,
transportation investments such as the Vancouver
Island Highway, the Westcoast Express, and BC Ferry
construction have a major impact on cconomic :
efficiency and help make BC more attractive for
private investment.

At the same time, budget shishing that closes
rural and urban hospitals, stops school construction
and limits post-secondary education creates a less
healthy and less skilled workforce - and that harms
BC's ability to suecced in the highly competitive
global economy,

Those who support-harsh cuts to investments
and social programs point to-other Canadian
provinces such as Ontario and Alberta and to the
actions of the federal government to niake their

MLA pension plan
ended —

In July 1995, the BC government. terminated the
long-standing MLA pension plan.

As ofthe next election, MEAs will no longer be
able to contribute to, or accumulate service in, the
plan that has been the focus ef strong public
concern. :

The old MLA pension plan had been in place
since 1955.

case that deep cuts are also necded in HC. But the

fiscal and economic situation in BC is very different

from the economic problems-faced elsewhere,

Here are.the facts:

u Alberta's debt per cipita is almost double BC's
and Ontarig’s is over 50 per cent bigeer than
BC's. BC has the lowest per capita debt in Canada,

a ‘The federal government spends 37.2 per cent of
every revenue dollar on debt servicing. In

Federal
Contributions

Personal
Income Tax
25%

Government Other Revenue
Enterprises 9%
5% Natural
Resources
12%

Other Taxes
9%

Property Taxes
6%

Retall Sales Taxes -

Corporate Income 15%
and Capital Taxes

9/560) 14dpng gq :94n05

Ontarig (9-i per cent of every revenue dollar.’
goes to servicing the debt, In Alberta the figure
is 14.2 per cent. BC spends only.7.5 per cent
of each revenue dollar lo service its debt - the
lowest in Canada. This inclides debt accumulited
from. budget deficits under previous governments
and new capital investments made by ihe current
government.

a BC enjoys the strongest economy in Canada and
has the best record of employment growth over
the past four years.

a BC's debt management plan is effective and
BC's financial house is in order. ‘The
province's Lop credit rating i is proof of this
wecomplishment.

BC government cuts costs without cutting
services or key investments

Cutting the cost of government without cutting
services is a major priority for the BC government.
The government is getting more value for tuxpaycrs’
dotkirs with major cost saving measures including:

a cutting operating costs across government,
including restrictions on hiring, fewer computer
purchases and office renovations, savilig
$50 million,

= cutting bureaucracy by reducing supervisory
positions by £50,

a reducing government advertising, consulting
and inivel budgets, saving uixpayers $32.5 million,

ending the existing MLA pension plan,
continuing the freeze of MLA salaries,
continuing the freese of Cabinet salaries,

establishing a three-month residency
requirement to apply for income assistance,
resulting in annual savings of $25 million,

reducing and capping ministry and schoo!
district administrative costs to redirect a saving
of $7 million back inte the classraem,

iutroducing reference-based pricing, the
comparative shopping program for Pharmacare,
siving cixpayers $30 million by ensuring
patients receive the best preseription drugs for
the lowest price, aid

combatting welfare fraud by introducing
ncasures such as compulerized tape matching
to catch double dipping, saving $20 million
aninually. , ,

By doing more with tess, the BC government has
reduced government spending growth to 2,9 per

cent in 1995/96 - down from 14 per cent growth
in 1991/92. After adjusting for population growth
andl inflation, this is actually a cut of 2.3 per cent in
the BC budget.”

Ii spite of major cuts to federal transfer payments.
and continuing growth in the BC populition, the
provincial government has not only held down the
costs of delivering public services — but his gone
one step further to trim costs and balance BC's
budget.

Direct Debt
Interest Costs
5e

Transportation
5¢

Natural Resources and
Economic Development

Justice, Law and Order,
and Other Government
Services

: hospitals and other social services.

BC working to protect health
education in face

The federal government continues
to cut health, education and social
assistance funding for British Columbia.
Compared to BC's funding levels in 1994,
BC will receive $477 million tess in the
coming fiscal year and aver $800 million
less in 1997/98, That's a loss of $1.3 billion
over two years.The cuts come at a time
when BC is dealing with higher costs as a
result of a rapidly growing population.

The BC government has been urging the federal
government to cut subsidies and tax breaks to
banks and corporations instead of cutting health
and education funding for ordinary people. This
year BC identified $5.4 billion in unnecessary
subsidies and tax breaks that Ortawa could
eliminate instead of the $4.1 billion in cuts that it
is making to social programs across the country.

The $5.4 billion inchides: .

2 $2.9 billion in major tax, breaks to banks and
business,

$1.9 billion in business subsidies, and

$600 million on regional development agencies.

BC WINS: PRAISE: FROM INDEPENDENT ANALYSTS IN. 1995. .

BCs financial management has been praised by investment firms and bond rating
agencies that rate government performance in Canada and around the world:

7 “British Columbia’s economy has shown
woe robust growth, surpassing the national
economy for eight consecutive years.”

—PaineWebber Corporate Bond Research,
": New York

ibe strongest in the country.”
: Nesbitt. Burts, Toronto

: "—ScotisMcLeod, Toronto _

“Consumer Spending trends are by far
“Debt levels remain the lowest in:

British Columbia enjoys the highest
provincial credit rating (Aa2/AAs) ih in

“«the province’s economic fundamentals
continue to improve.”

—Canadian Bond Rating Service, Montreal

“u( BC's) budgetary position bas shown
steady improvement...”
—Standard & Poor's, Foronto and New York

Canada.”
~—Dominion Bond Rating Service, Toronto

“BC retains the best debt profile of the :
Canadian provinces.” .
—-Goldman Sachs, New York .

-Three-quarters of provincial spending is passed song 2 as grants to sch

Education
28¢

33¢

and
of federal cuts

KC also proposed climinating overlap and
duplication between federal and provincial
governments in the areas of labour market training,
international trade promotion, mining, forests and
fisherics. Thus far, the federal government has not
changed its approach,

Federal cash transfers once paid for about a-third
of British Columbia's health care, education and
income assistance expenditures, Ottawa's
budget cuts will reduce the federal government
contribution to. BC. social programs ta only |
11 per cent of the total cost by 1997/98.

Despite these federal cuts, protecting health care
and cducition remains a top priority for the: provincial
government.

In fact, over the past four years, Ue BC government
has made significant new investments to ensure
that British Colunibians have access to the highest
quality of health care and education, closer to
where they live. 7
Here is the record:
® building, expanding and renovating schools,

_ creating more than 40, 000 new spaces for BC

students - the most i Canada,

a committing $100 million to new-classroom
computers over the next five years, helping
students with special needs and other education
improvements in the classroom, |

e adding 13.300 new postsecondary spaces al
BC's colleges and universities,

a. building the new University of Northern BC, the
first new public university in Canada in 25 yeirs,

a. investing $1.1 billion more in-health care since

© 1991 to build or expand hospitals and community
health centres across BC,

i expanding community-based and preventive
services, including funding for menu health
services, AIDS prevention, immunizition, home
support and aborizioal health services,

# reducing waillists for cardiac surgery and cancer
treatment - waitlists in bath these: categories

“are down 50) per cent inthe fast four years,
e building lwo new cancer clinics i in Surrey ‘an

Kelowna and improving existing: services in
Vancouver and Victoria,

x building a BC Centre for Disease Control,
« banning extra billing by doctors for Medicare

services, protecting British: Columbians from a
two-tier US-style health care system, and

a introducing basic dental and vision care benefits

' for children in low-income families and chminating
Medical Services Plan premiums for 430,000
lower: “income | families,

Residency requirement to save $25 million

in BC welfare costs

People who move to British Galumbia naw have
to live here for three months betore they are clizible
for BC income assistance. The BC government
announced the ree month residency requirement
effective December 1, 1995 in response to federg al
cuLs to social ograns

Oltawa has been particularly determined to
offload its income assistince responsibilities to BC.
While it picks up 50 per cent of these costs in most
provinces, it only picks up 34 per cent in BC;and
thissshare is rapidly fling. This inequity has cost

‘BC $1.7 billion since 1990.

‘The problem is the growing number of pcople
moving here and immediately trying to collect
welfiire, Over the first nine months of 1995, new
arrivals from other provinces = primarily’ Ontario,
Quebec and Alberta - accounted for wn average of
2,200 new welfiire cases cach month.

Rather than ask-BC taxpayers to foot the bill
the government chose-a BC-irst policy chit will
save British Columbians $25 million each year and
protect benefits for British Columbians in need.

The three-month residency requirement is. the
latest in a series of steps to limit growth it in income -
dSSiSLANCE Costs.

Other steps include:

lightening cligibility guidelines for hardship

benefits while cnsuring those in need receive

support, saving $45 million a year,

measures to eliminate abuse, waste and

duplication, including computer identification

of people collecting welfare in. mare than one
province, saving $47 million:in 1994/95, and

90 per cent increase in welfare fraud

investigations resulting in an additional

saving of $16 million lust year,

The federal government is attempting to overrule
the three-month residency requirement in BC by
withholding $47 million from federd trinsfer payments
to the province. However, rhe BC government will
fight these cuts and take the necessary legil steps ta
protect BC's right to determine where aiir income
assistance dollars go,