Keith Baldrey: Roll up for Hansen’s budget of illusions

March 12, 2010

Finance Minister Colin Hansen was missing a few props when he gave his budget presentation last week.

It would have been appropriate to have on hand a deck of cards, a black hat and a magic wand. After all, the minister deftly performed some magic tricks and sleight-of-hand games.

Observe his never-before-seen Take the ICBC Cash and Hide It trick that wasn’t even noticed by his audience until he left the room. Truly amazing!

This bit of trickery will see his government suck almost $800 million out of ICBC’s cash reserves over the next three years (this money is on top of the $750 million the government will receive from ICBC’s earnings).

But this giant windfall isn’t actually specifically noted in any place in Hansen’s budget. An oblique reference occurs on page 22 of the budget book, but no dollar figure is mentioned. The money is included in a single line item — "contributions from self-supported Crown corporations" — in the so-called "blue book" of spending estimates.

This huge financial transaction is only spelled out in the fine print of ICBC’s service plan (kudos to MoveUP, the union at ICBC, for being the first to figure out the finance minister’s magical powers on this front).

Another crowd-dazzling feat of sleight-of-hand came with Hansen’s Almost Giving Back What We Took Earlier trick with arts funding. In fact, this gets its own little display box on page 64 of the budget.

This nice presentation (entitled A Renewed Emphasis on the Arts and Sports: New Opportunities for Participation) tries to leave the impression that the B.C. Liberal government is committing huge financial resources to the arts sector.

To make this argument, the budget actually refers to money spent on arts three whole years ago. This bit of wizardry — only the minister could use money spent years ago to dress up his budget today — also sees the government include the operating grant for the Royal B.C. Museum as part of arts and culture spending for the first time, in order to make the total seem quite larger than it really is.

As well, no mention exists anywhere that the charitable gaming grants — which fund everything from Little League baseball to arts groups to parent advisory councils at schools — are still reduced tens of millions of dollars from 2008 levels.

The finance minister, in trying to make an apples-to-apples comparison, replaced a lot of those apples with oranges — without telling anyone. The smoke-and-mirrors aspect of this argument was quite impressive.

Finally, we come to the greatest magic feat of them all. With his hidden powers, Hansen suddenly turned the dreaded Harmonized Sales Tax (HST) into — wait for it — a tax purely dedicated to funding health care.

Hansen tried to impress his audience with this stunning attempt at illusion. He was turning a giant negative into a much-needed positive, right before our very eyes.

Unfortunately for our own Merlin, this trick fell completely flat in the room. The audience — made up of reporters and special interest groups including business, labor and environment sectors — roared with laughter as he tried to explain his reasoning.

This bit of foolery smacked of desperation. The HST is a serious drag on the government’s standing with voters, and pretending that it is responsible for funding health care (and nothing else) indicates the B.C. Liberals know how vulnerable they are on this issue.

And one has to wonder how much credibility Hansen has right now when it comes to making any kind of economic argument. The polls indicate voters are smarting over his last budget, which turned out to be wildly off-mark in its projections.

It seems the longer a government is in power, the more tricks it invents to fool the people who keep electing it. We are witnessing this right now with the current administration, which finds itself mired in dire financial straits and a low standing in the polls.

However, there comes a point where it’s no longer easy to fool the voters. We may be at that point now, and it may not matter how many ruses the finance minister and his colleagues come up with.

The government needs an economic miracle — with a corresponding rise in revenues — just to begin winning back voters. Putting on an amateur magical show at budget time isn’t going to cut it this time.

KBaldrey@globaltv.com

Keith Baldrey is chief political reporter for Global BC.

Baldrey’s syndicated column has been printed in community newspapers across BC.