With fears of an international financial crisis around the corner, B.C. Finance Minister Carole James is asking for fellow government officials to cut their discretionary spending.
The province is hoping to recover $300 million, which James says is necessary as her ministry heads into the planning process for February’s provincial budget.
“I asked ministers to take a look at their discretionary spending in their ministry,” James said.
“I have asked them to have a look to find savings so we have those dollars put aside for any risks that occur before the end of the fiscal year — forestry being one example where there are real challenges for those forestry communities.”
Discretionary spending includes employee travel, office expenses, consulting contracts and room rentals.
WATCH (aired August 23): Growing global uncertainty triggers Canadian recession fears
James says her government is worried about Brexit and ongoing tensions between the United States and China as potential problems for the economy here.
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“Those kind of issues are going to have an impact of British Columbia. You are seeing economic changes in our province as well,” James said.
“It is important for us to be responsible. It is important for us to be prudent in our budgeting.”
WATCH (aired February 19, 2019): No surprises in 2019 B.C. budget
The B.C. government stressed fiscal prudence earlier this week when unveiling the first quarter fiscal update. The province has put aside additional money for contingencies.
B.C. remains the only province in Canada with a AAA credit rating from the three main rating agencies and is forecasting a budget surplus of $179 million for the fiscal year. The surplus is down from the $274 million forecast in February.
One major surprise around the corner could be ICBC.
The province forecast the public insurer would lose $61 million in the first three months of the fiscal year, but is now reporting ICBC made $55 million after major changes came into effect on April 1.
But there are two ongoing legal cases involving the province’s changes.
The courts have still not ruled on whether the province is allowed to restrict the number of expert reports lawyers can use in settlement cases, and whether B.C. can legally cap settlements for “soft-tissue injuries” as defined by the province.
James says B.C. is still in the best position in Canada to weather any economic storms. The province does not plan on cutting any programs for British Columbians.
WATCH (aired August 15, 2019): B.C economy predicted to slow down
“We are asking people to go through their budgets and find the resources that they can. And that will mean in some cases it’s only necessary travel that is there,” James said.
“We are watching taxpayer dollars and making sure we can spend them on the people who need them.”
But this may not be the end of fiscal prudence. James says every dollar is needed for government priorities and this “is a government directive.”
“We want to make sure that we have the caution built in so we are prepared if we see further challenges,” James said.
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