CBC and the
Telegram carried a story on Tuesday that the province would be hit by a “mild recession” next year. There’s not much real news in that since oil and minerals will all be down in price for the foreseeable future. Major projects are coming to an end. All known. All foreseen. But since the Conference Board of Canada issued the release and used the words “mild recession” and so that makes it news.
Later on Tuesday, everyone carried
the story that Premier-designate Dwight Ball had written to the federal government to try and forestall the two percent hike in the harmonised sales tax. Same thing: news release, therefore news.
At the risk of repeating the same thing again, let’s just recall that the latest change in oil prices means that 36% of government spending this year will be covered by borrowing from the banks.
The sales tax hike won’t make much of a difference this year. The $50 million or so it will bring in between January and March will amount to precisely 1.6% of the revised borrowing. It was frig-all before oil dropped. It is even moreso frig-all now when compared to the magnitude of the provincial government’s financial problems.
We can say that revenues won’t be much better next year. This is another point worth bearing in mind. The local media have habitually followed slavishly behind the provincial government’s lead over the past decade and talked about last year, not the year coming up. and in truth. Well, this whole HST thing is another example of chasing mice when the deer are just over the hill.