B.C. faces $100-million welfare shortfall

he B.C. government is headed for a $100-million shortfall in its welfare budget next year suggesting that the province's deficit will be much worse than promised, the Opposition NDP says.

“What it shows is just how badly [Premier Gordon Campbell] has misjudged the economic situation. It puts the lie to his claims throughout the election and since the election that they are good managers,” social development critic Shane Simpson said yesterday.

Mr. Simpson's assertions are based on documents for an internal presentation at the Ministry of Housing and Social Development, obtained by the NDP, which say welfare recipients will increase by 27,000 to a total of 147,000 in June, 2010.

The forecast, outlined in a June briefing covering a response to the economic downturn, would be 28 per cent more than that budgeted by the province and would cost about $100-million, Mr. Simpson said.

Social Development Minister Rich Coleman conceded Mr. Simpson could be on target in his interpretation, but said the government could cover the overrun from contingency funds or forecast allowances without any serious impact on government finances.

“It's conceivable with the pressure on the economy that that number could actually happen,” said Mr. Coleman, though he noted the shortfall would come in the next fiscal cycle, after March 31.

Welfare is a statutory obligation for the government. For that reason, there will be no cuts to rates, Mr. Coleman said.

Mr. Campbell has hinted that challenging economic times marked by soaring unemployment and falling commodity prices have undercut the government's ability to stick to the $495-million deficit he pledged throughout the recent provincial election. The legislature is to be recalled on Aug. 25 and a new budget tabled on Sept. 1.

Earlier this year, the Liberal government adjusted their legislation outlawing budget deficits to allow them to run two consecutive deficits.

Yesterday's welfare disclosures, said Mr. Simpson, “confirm the growing problem that we face, the growing problem of the economic challenge, the effect on employment, the numbers of people who are losing their jobs.

“All of these economic indicators tell us we're in a much more difficult place than Mr. Campbell would like people to believe.”

Mr. Coleman said that since the Liberals won a third term in May, some discretionary grants and programs in his department have been frozen as a result of a “sober second look at what was being efficient or not.”

The government is in a process, he said, of asking tough questions. “When you're in a tough economy, you ask tough questions and that's just good management on behalf of the taxpayers.”

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