Mike de Jong’s debut as B.C. finance minister was a grim one. The first financial update for this election year projects a $1.4 billion decline in natural resource revenues from Kevin Falcon’s one and only budget in February.
Most of that is from declining natural gas revenues in the next three years. And it’s not just the price of gas that’s lower than the finance ministry’s array of private sector experts had forecast.
The volume of B.C. gas sold is down as well, as abundant new sources of shale gas come on-stream in the U.S. with oil, currently the only market Canada has.
De Jong’s response shows how serious this problem is for any B.C. government. He inherits Falcon’s political commitment to present a balanced budget next spring. How he will do that, and be believed in a heated post-HST election campaign, remains a mystery. De Jong announced a hiring freeze for government staff, and a management salary freeze across health care, universities and Crown corporations as well as government operations. He hinted at an even harder line with unions, as the government’s largest employee group continued selective strike action.
This, and the familiar vow to rein in travel and other discretionary spending, won’t come close to replacing the lost gas revenues.