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October 27, 2017 11:53 pm

Auditor General Issues Report on Province’s Finances

Tuesday, March 8, 2016 @ 11:50 AM

Victoria, B.C.- Provincial Auditor General Carol Bellringer has released her report on B.C.’s Financial Statements for the  2014/15 fiscal year.

Generally speaking the  audit produced  good results,  but Bellringer  says  there is still the nagging issue of how  the government  records  certain  federal contributions.

She says the  BC Government’s method of recording those  contributions were “under-reported by $191 million in the last fiscal year”  which she says  clouds  the province’s true financial health.

“We have worked with government to resolve many other accounting issues over the past few years, and we wish to do the same with this issue,” said Bellringer.

Some other highlights from the  report show that the government :
1. had $63 billion of debt as of the end of last fiscal
2. received $135 million in revenue from asset sales last year
3. paid parents $157 million during the teachers’ strike, just a bit  less than it saved in teachers’ salaries
4. spent 68% of its annual budget on health and education, leaving only about $14 billion for the rest of government’s functions


And how much on aboriginal affairs

    Not nearly enough.

Whatever went to aboriginal affairs (as you call it) would have to come out of the $14 Billion that was left after Health and Welfare. Once you factor in wages and salaries for civil servants and politicians, you don’t have much money to play with.

    health and education

Money for non-aboriginal affairs also has to come out of the paltry 14 billion pot. Wages and salaries also need to be paid as mentioned. No wonder all the new spending on much needed (no choice really) infrastructure has to be financed with borrowed money, i.e. adding to the debt.

    And that’s the rub. ALL new ‘Capital’ spending is ALWAYS financed by an increase in overall debt. It could not be any other way, (unless we were exporting a completely unsubstainable amount of real wealth, and receiving some other country’s ‘money’ and not alternate imports for it ~ which is a virtual impossibility), because almost all existing money has already been ‘costed’ into the prices of some existing goods or services, which could then not be sold for the price of their making or provision. There has to be a continual expansion of credit when new Capital spending, public or private, is incurred. The problem with government Capital spending is there is no equivalent in government accounting to a Capital Account, as exists on the Balance Sheet of every private business. Accordingly, we NEVER see any figures representing it, or the contra value of the ASSETS this spending creates. Only the Liabilities, (Provincial Debt).

      Seeing ONLY the Liabilities (Provincial or National Debts) creates an incomplete picture of where the Province (or Dominion) really stands financially. If Capital spending is to be truly beneficial there should be a way to account for the advantages it enables. In a private business this would be reflected by an increase in profit. Governments are not, or at least should not, be in businesses directly primarily to make a profit. They already do so indirectly, through various Crown corporations and Authorities, but those agencies use the same methods of accounting every other private business does. Government does not. Yet when government Capital spending creates a new school, or hospital, or road, bridge, etc., there is no doubt that there has been a ‘value’ created that previously did not exist, and in all likelihood will outlast the length of time it takes to retire the financial Liability charged against it. But we don’t ever see this, and if we were wise, we’d start to ask, “WHY?” For otherwise we may just be paying for what we’ve already paid for, multiple times over, and WHY should we ever be doing THAT?

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