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Inventing Prosperity

BC Liberals say they are good on the Economy. The numbers show the NDP is better.

Marco Procaccini

As BC’s hotly contested election campaign heads for its final week, the embattled BC Liberals, feeling the NDP closing in, are pushing more than ever the one main piece of propaganda they hope BC voters will accept: how good they are on the economy. But several reports released in the last week, including from Statistics Canada and the Social Planning and Research Council, confirm what earlier reports have said: the economy isn’t better than in the 1990s, and the Liberals have nothing to do with the recent improvements, and in fact have hindered economic recovery.

Statistics Canada released its final summary of BC’s economic performance for the year 2004 showing in fact it has improved in the past year to the point of where it roughly was during most of the 1990s, while the NDP was in government. But one day earlier, the Social Planning and Research Council released its summary report of homelessness and poverty in BC showing that the “dismal decade” is in fact now, under the Liberals.

Of course the Liberal campaign, awash in a myriad of electoral financing scandals, is so desperate to take credit for something positive in BC, that it’s pulling no stops in claiming credit for things it has not done and, in some cases, for what the NDP did before it. This shows in their ads. In some of the TV spots, actors pretend to be workers returning to BC praising the premier for what a good job his regime is supposedly doing.  “It’s time to feel good that BC is finally working again,” says the closing line. Meanwhile, reports in Liberal-friendly news media talk about the “lowest unemployment rate in decades.” Gordon Campbell repeatedly thundered over and over again on the May 3 televised leaders’ debate, “we created the ground for prosperity.”

The truth tells a different story, and no amount of expensive theatrics can change it.
First off, Statistics Canada says nothing about the supposed huge influx of people “returning to BC.” In fact, according to Statscan reports over the last few years, it seems, despite all of the outlandish corporate media claims of “brain drains” and “mass exodus” in the late 1990s, show that there never were very many more people leaving BC than arriving, and, furthermore, in terms of total migration, BC enjoyed an immigration boom throughout the 1990s and has experienced a net growth every year right through to today.
Secondly, the BC Stats web site http://www.bcstats.gov.bc.ca/ shows annual unemployment is still hovering well above the seven per cent mark. In addition, looking at unemployment stats from Statistics Canada, it appears BC’s annual jobless rate has hovered roughly from the seven to nine percent mark since 1992, and in the 1980s, it was much higher—often hitting well into the teens. Therefore, “lowest” rates in decades means little.

Furthermore, these agencies report that real average weekly earnings in BC have fallen by almost two per cent since the Liberals took office, and most wage rates are now not keeping up with inflation. Overall consumer spending has fallen since the 1990s; consumer savings are lower as well, and consumer debt is at an all-time high. The Canadian Center for Policy Alternatives www.ccpa.ca reports even capital spending, the supposed saviour of our economy according to the Liberals, still hasn’t reached the levels of the 1990s.

Add to this, the SPARC report shows homelessness has almost doubled in the last four years, and the services and affordable housing programs are no longer there to deal with situation. Similar reports have shown how poverty, especially among youth and the disabled, is growing.
So much for the Liberals being good economic managers.

Yet we keep hearing the 1990s called the “dismal decade”, despite the obvious fact that BC enjoyed more economic prosperity during those NDP years than today.

Statscan reports BC’s real GDP, as in the rate the total wealth output of the economy unaffected by things like immigration and inflation, in 2004 was 3.9 per cent, better than even what the Liberals are claiming. Yet this is after three years of being well under three per cent. More importantly, this one-time high GDP figure is not much more than BC’s annual real GDP of around 3.1 per cent throughout most of the NDP years of the 1990s, and well below the record 4.6 per cent in 2000.

Similarly, average yearly job growth was about 2.2 per year during the NDP tenure, compared to only 1.6 in the last four years.

Furthermore, during the 1990s, BC’s huge job creation rates were largely offset by an immigration boom that often grew faster than the GDP and the economy. That’s why the unemployment rate stayed at the rough seven to nine per cent constant.

Today, after four years of Liberal austerity, that immigration rate has tapered off. Yet the jobless rate has hardly changed at all.

So what is fuelling the so-called “boom” in the last year? The recent rise in global commodity prices and 50-year low interest rates, along with the federal Liberals, after a series of grueling transfer payment cuts in the 1990s, is putting money back into provincial coffers.
Surveys by the major chartered banks this year have listed some of these as the main reasons for BC’s recent moderate economic improvement. None of them are giving credit to any of the major policy initiatives of the BC Liberal regime.

And this is a key point. In the 1990s, BC had a strong economy without the benefits of record high commodity prices and record low interest rates and while having to endure huge funding cuts from the federal Liberals. This is because the NDP government actually engaged large amounts of public funds and resources in actually stimulating job creation. The BC Savings Bond program, as an example, was invested in the construction of schools, hospital, highways and other public infrastructure all over the province. In addition, the government of that day invested directly in the development of new economic sectors, such as film and high tech, and fostered the development of clean energy and engine technology, as well as comprehensive recycling programs and tourism.

This is exactly the opposite of what the Liberals have been doing. Raising taxes and user fees while cutting the very services people are paying taxes for; laying off thousands of people, closing schools and hospitals and other vital public infrastructures; cutting wages; removing local job protection measures for logging; gutting collective agreements, damaging privatization scams, and introducing special low minimum wages and child labour provisions do not create economic growth or prosperity. They can make a small wealthy and well-connected elite that much more wealthy and powerful. But everyone else always suffers.

The results, as shown, speak for themselves. The big difference between the “Dismal decade” of the NDP, and the “Golden decade” of the BC Liberals is that the former created actual prosperity and people were overall better off. The latter has produced a bunch of numbers that show people are paying more with less money to pay; and getting less for the money they pay with—all while a greater chunk of economic wealth created by British Columbians goes into the pockets of a shrinking elite of wealthy spoiled brats and economic insiders.

Good management? Forget it.

There appears to be a concerted effort by the Liberals, BC’s corporate elite and the major media to downplay these facts in order to artificially present the Liberals as good economic managers. But voters might want to consider the numbers presented here and ask whether they are better or worse off than four years ago when May 17 comes around..