NEWS RELEASE · 6th March 2013
BC Conservative Party
John Cummins, leader of the BC Conservatives, today called on Mike de Jong, the province's Finance Minister, to admit that the inclusion in his 2013/14 Budget of $1.9 billion in 'phantom' BC Hydro profits means that the government's fiscal plan is seriously out-of-balance.
"The surpluses forecast by Mr. de Jong are, in fact, deficits," said Cummins. "He was entirely wrong to include BC Hydro's 'profits' in his calculations because, as the Auditor General has noted, those profits are non-existent."
In October 2011, B.C.'s Auditor General issued a report - entitled, 'BC Hydro: The Effects of Rate-Regulated Accounting' - which stated that the Crown corporation's use of deferral accounts "creates the appearance of profitability where none actually exists."
Cummins noted that de Jong's 'balanced' budget and fiscal plan rested on BC Hydro having three consecutive years of profitability.
"Mr. de Jong claims that BC Hydro will have a $545 million profit in the up-coming year, and then profits of $618 million and $692 million in the following two years," said Cummins.
"Those profits, however, are an illusion - which means that Mr. de Jong's Budget really has three consecutive deficits of $348 million, $407 million and $232 million."
The BC Conservative leader concluded by observing that whereas the BC Liberal Budget showed a cumulative, three-year surplus of $868 million, the actual deficit over the three-year period will be at least $987 million.