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Independent economist says BC Budget revenue projections are, mostly, solid
VANCOUVER/CKNW (AM980)
Sean Leslie | Email news tips to Sean
2/18/2013

An independent expert hired by the provincial government says the revenue projections in tomorrow's budget are solid, with one exception.

Former Bank of Montreal chief economist Doctor Tim O'Neill says he found no glaring problems with the budget's revenue projections, citing ample evidence of professional competence and caution.

O'Neill has advised the government to lower its expected returns from natural gas sales, even though it bases those estimates on private sector forecasts.

"Private sector forecasters, and I would include myself among them, simply continue to overstate what we thought was going to happen to natural gas prices in the near term."

O'Neill says natural gas rates have been overestimated in five of the last eight years by an average of 584 million dollars.

O'Neill doesn't blame the government, saying the projections are based on private sector opinions subject to global volatility; but he does suggests shading those revenue guesses by 60 or 70 million dollars in the coming year.

The government has already indicated O'Neill's advice was used to alter the budget that will be released tomorrow.

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  • 15
  1. commonsense posted on 02/18/2013 03:37 PM
    So is he wrong or not?
  2. brianp1950 posted on 02/18/2013 03:45 PM
    one word comes to mind, BULLXXXX, just like the projected defecit in 2008, 495 million count on it not a penny more. Ended up being 2 billion plus. For this reason alone we need a change in government even just to clear up any fiscal mess. Another four years of his crew and I fear we are doomed. And for those of you tha think we are better off now than we were in 2001 because we have lower taxes, think again, our debt has more than doubled and that relates to taxes down the road for us and our kids. Defecit end of March 2013 is estimated at 56 billion dollars plus all the debt in deferral accounts. We could be the next Greece
    1. Dale - left coast posted on 02/18/2013 04:55 PM
      @brianp1950 You obviously missed the US dimmicrap induced Global Crash in September 08 . . . do you think that had anything to do with projected revenues?

      Better off now than in 2001? We have been better off for over 10 years than we were in the 90's . . . FACT ! ! !
      We were a "Have Not" Province in the 90's . . . getting Welfare from Ottawa . . . thanks to the financial prowess of the Dippers. Check out Manitoba . . . that's your future ! ! !
    show more replies
  3. Fate posted on 02/18/2013 03:45 PM
    Did the liberals feel that the BC Auditor General was not qualified to reveiw their budget or were they concerned that they wouldn't be able to "influence" his message? Did the government really need to spend even more money?
  4. insite posted on 02/18/2013 04:02 PM
    Questions still arise. We have had independent or not so independent reviews of Translink, ICBC, BC Hydro, BC Ferries. Now, Mr. O'Neill has supposedly performed an independent review of the upcoming balanced budget.

    And we have had opinions from an Auditor General named John Doyle on past budgets and budget performance but he has been turfed.

    The only credible review or audit has come from Mr.Doyle who is independent. A person hired by the government is not so independent independent by definition of an employer-employee relationship.

    That the government likes Mr. O'Neill's findings and recommentdations is proof enough to conclude that the fix is in.

    .
    1. Ron_26 posted on 02/18/2013 04:13 PM
      @insite There's nothing to audit yet. Soliciting non-government opinions are common practices.
    2. commonsense posted on 02/18/2013 04:35 PM
      @insite As well, "...The government has already indicated O'Neill's advice was used to alter the budget that will be released tomorrow." So it wasn't so much that they made a budget and he said, okay that's cool. More so look at the reality of the budget, and adjustments were made. I don't know how many revisions were made, but I imagine it wasn't just one.
  5. WizardOron posted on 02/18/2013 04:05 PM
    B.C. Dispatch
    After years of fanciful forecasts, B.C. Liberals need a realistic pre-election budget

    JUSTINE HUNTER

    VICTORIA — The Globe and Mail

    "In 1988, the Social Credit government created the Budget Stabilization Fund – which quickly became known as the B.S. fund – to help produce a surplus for an election year budget."

    Kind of sounds like the BC Liberals LNG Fund

    "The C.D. Howe Institute released its Pinocchio Index report on Friday, demonstrating how governments across the country chronically fail to stick to their spending plans. The B.C. Liberal government is no exception, ranking in the middle of the pack: Over the past decade, it has gone roughly $6-billion over budget."

    And to blame the BC Liberals over estimation of natural gas rates on private sector opinions is simply "passing the buck". Governments have to analyze and estimate based on those numbers and their own and should always exercise a high degree of caution.

    And are they again getting BC Hydro to defer their own debt in order to create another phoney surplus for the BC Liberals to pad their budget with?

    I put no faith in what the BC Liberals will put out as a budget tomorrow. This is such a convenient time to do it to as it will not be scrutinized or verified until after the election.

    I hope some of their own MLAs develop a little backbone and spine and vote against it. All MLAs should remember you work for and should always be faithful to your constituents. You can identify with ideas and policies of a particular party but the party should never come before your constituents!!!
  6. insite posted on 02/18/2013 05:21 PM
    Ron 26 and commonsense: Note that I only mentioned audit once-in reference to the A_G. who performs audits but is ignored.

    So, you've lost me and others as well...

    Why pay for a not-so-independent review when the government has been told over and over that natural gas revenue projections were being overstated by many, including A_G Doyle. If it's standard practice to obtain outside opinion, why not ask for something more rather than the obvious?????

    When the last four fiscal years incurred larger deficits than forecast, the government still hires Mr. O"Neill, who tells it to lower its expectations of natural gas revenues. We already knew that!!!! And the government didn't?

    But, that is just a red herring. The government will release a very creative budget-balanced of course-because it will not have to take responsibility for it.
    1. commonsense posted on 02/18/2013 05:30 PM
      @insite Just note, I am taking info only from what has been broadcasted through the news - as many of us are doing, or trying to. The rest are assumptions. This isn't a case study, so the assumptions would make for a pretty weak argument.

      Regardless of your comments, the review came in and the government made adjustments. Some in favour of the budget and some lowering expectations. That's about all that can be said.
    show more replies
  7. WizardOron posted on 02/18/2013 09:17 PM
    Energy revenues alter B.C. budget
    Justine Hunter
    VICTORIA — The Globe and Mail
    Published Monday, Feb. 18 2013, 6:15 PM EST
    Last updated Monday, Feb. 18 2013, 9:26 PM EST
    Quote:

    "Mr. O’Neill, speaking to reporters, stressed that he had only seven days to do his analysis. He has done similar work for the federal government and the government of Ontario but had months to complete his work in those cases.

    As a result, he did not assess the spending figures, nor did he look at some revenue streams, such as dividends from Crown corporations."

    MY Opinion:

    He only studied the natural gas revenue projections and glanced over the rest of the budget not quite the ringing endorsement as it is being made out to be.
    1. insite posted on 02/18/2013 09:48 PM
      @WizardOron Thanks for bringing up Justine Hunter's article from G & M.

      Also, it is worthwhile to point out that natural gas revenue represents only 10 percent on the total revenue forecasts. Just think if natural gas revenue estimates were $60 million off, how credible are the other numbers?
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