Fraser Institute News Release: B.C. government should stop relying on boom-and-bust natural gas revenues to fund ongoing programs
July 09 2024 - 7:00AM
The British Columbia government should stop relying on volatile
boom-and-bust resource revenues—like the Alberta government—and
fundamentally change its fiscal approach, finds a new study
published today by the Fraser Institute, an independent,
non-partisan Canadian public policy think-tank.
“Clearly, the B.C. government should stop using onetime natural
gas revenue to finance ongoing government programs,” said Ben
Eisen, senior fellow at the Fraser Institute and co-author of
A New Fiscal Framework for British Columbia.
The B.C. government’s natural gas revenues—the province’s
primary source of resource revenue—were an estimated $2.3 billion
in 2022/23 and are projected to total more than $3.3 billion
between 2024/25 and 2026/27.
The government is spending these onetime revenues to finance
ongoing programs, creating a mismatch between the nature of the
revenue (again, onetime resource revenue) and the nature of
spending.
Instead, the government should adopt a new fiscal framework
based on spending restraint and investing resource revenue in a
provincial fund. The government could use earnings from the fund to
finance ongoing spending, better matching the flow of revenues with
the flow of expenses.
If B.C. adopted this fiscal framework, it would stop relying on
the same type of boom-and-bust resource revenue that’s made the
fiscal situation in Alberta so volatile.
“For years, Albertans rode the resource revenue roller-coaster
and saw their fiscal situation rapidly deteriorate—the B.C.
government should get off that roller-coaster,” Eisen said.
MEDIA CONTACT: Ben Eisen, Senior Fellow, Fraser
Institute
To arrange media interviews or for more information, please
contact:Bryn Weese, Director of Communications, 604-688-0221 ext.
589,bryn.weese@fraserinstitute.org
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