Memories of cloudy days, or cloudy memories? The BC NDP government of the 90s was no worse than the BC Liberals

Jericho Beach, Vancouver

It’s election time in BC, again, and that means it’s time for many in the Province to collectively recall how ‘badly’ the BC NDP mismanaged the economy back in the 1990s.

Even before the BC Liberals won office and replaced the BC NDP in 2001, they were claiming the New Democrats had set BC on the path to financial ruin. In the months following the 2001 election, then newly-elected BC Liberal Premier Gordon Campbell continued repeating this claim*. The narrative has become so pervasive that many of a young generation of BC voters who were barely alive in the 90s seem to accept it without question, while older voters make vague allusions to how the NDP government spent and squandered like there was no tomorrow.

Social media has helped amplify this collective ‘memory’, circulating op-eds from people like former BC Liberal Minister of Finance Kevin Falcon* and former BC NDP Minister of Finance (and, prior to that, leader and father of the BC Liberal Party) Gordon Wilson*, who say the BC NDP will blow billions and that the BC Liberals are the responsible choice for the economy. The inevitable consequence has been that voters ‘remember’ the BC NDP mismanagement and continue to mistrust them to responsibly manage the Province.

Ferries
Property of Adrian Raeside. Used with Permission

This false narrative has been catalyzed and cultivated by the BC Liberals for political purposes, and some people are still buying it. And for some reason these folks haven’t noticed that no one is presenting actual data to substantiate the idea. Or maybe they just ‘know’ it’s true intuitively. After all, we do seem to have some vague recollection that things weren’t very good in the 1990s and… something-something Casinogate* and… oh yeah, the fast ferry fiasco! Right? No party responsible for wasting nearly $450 million* like that could be trustworthy enough to govern. Right?

If the smell of scandal has followed the BC NDP, the BC Liberals have outright stunk of it.

bc-legistlature-raid
Police raid offices in the BC Legislature in 2003 as part of a fraud investigation attached to the sale of BC Rail.

Yes, there were BC NDP scandals. Enough to make BC hate ‘gate-ism’ (if you can remember, before the aforementioned Casinogate affair was Bingogate–though it’s also worth recalling that, despite accepting responsibility for the scandal, then-Premier Mike Harcourt was found to have done nothing wrong*).

But if the smell of scandal followed the BC NDP, the BC Liberals have outright stunk of it during their time in office. The BC Rail scandal*, for example, resulted in two ministerial aides in the Premier’s office cutting a deal in which they plead guilty to leaking insider information during the sale process, compromising taxpayer interests. The guilty plea killed criminal proceedings that would have otherwise required testimony from BC Liberal ministers associated with the sale, including now-Premier Christy Clark. Less salacious, but again resulting in a guilty plea from a government staffer over ethical wrongdoing, was the Deletegate* affair. And who could forget the botched implementation of the HST*?

The BC Place roof, replaced in 2010, was $149 million over budget

Scandal and mismanagement from both parties aside, a hard look at data from the past few decades suggests that the Province broadly fared about the same under the BC NDP in the 90s and the BC Liberals over the last 16 years

If both parties were involved in scandal, the same can be said for mismanagement. Alongside the aforementioned BC NDP fast ferries fiasco ($244 million over budget, with the final $434 million cost to taxpayers possibly inflated due the the BC Liberals selling them well below their estimated value) is an expensive list of over-budget projects undertaken and overseen by the BC Liberals, including the Vancouver Convention Centre ($276 million over its first costed budget, though some argue the construction cost inflation couldn’t have been anticipated), the BC Place roof renovations ($149 million over the first budget* approved by the Provincial Treasury Board), and the South Fraser Perimeter Road project ($264 million over budget*), among others. If that’s not enough, both parties have also been guilty of issuing fudge-it budgets* before elections while in government.

I compare BC with Alberta, Ontario, and Canada as a whole

Scandal and mismanagement from both parties aside, a hard look at data from the past few decades suggests that the Province broadly fared about the same under the BC NDP in the 90s and the BC Liberals over the last 16 years, at least relative to the country as a whole and a couple of ‘comparator’ provinces.

This sort of comparison is not ideal, but beyond comparing the Province to these sorts of comparator jurisdictions we can’t easily even begin to say how the Province would have fared during each party’s time in office had the other party been in government during that time. In economics we call this being unable to observe the counterfactual. Trying to get around this issue is central to applied economics today. But this a blog post, not an applied economics paper.

GDP growth averaged 3% per year over parties’ time in office; the wage premium in BC relative to Canada remains about the same today as it was when the BC NDP left office, though people are working relatively a little more today; and while net debt rose a little faster under the BC NDP, total debt rose much faster under the BC Liberals, doubling to $66.7 billion. Income inequality was lower on average under the BC NDP but rose toward the end of their final term, while it’s remained high under the BC Liberals but fallen compared to what it was when they took office, and fallen faster than it has in other jurisdictions. In short, neither party has outperformed the other on any reasonably considered economic metrics.

Oh, you want actual evidence to back up what I say? Good. This post motivates and combines a number of shorter posts covering each of the topics I touch on:

I note that these are each entirely unique posts from this one. Please read them individually to see the full analysis I’ve completed. I’ve provided links to official reports and data from Statistics Canada so you can check for yourself. I also reference things like bank and media reports, and mark these sorts of links with an asterisk *.

Two quick notes. First, this is a survey of data aggregates intended for consumption primarily by non-economists. There are no econometric analyses. It is meant as a preliminary search for evidence that the BC NDP handled the economy worse than the BC Liberals have (relative to other jurisdictions). Despite looking hard, I find no evidence of this.

Second, I want to say that this exercise is decidedly not intended as an endorsement of any one party this election. I am broadly a moderate who cares about good governance. There is a non-zero probability I could vote for a candidate from any of the three main parties (as I have in the past). I remain undecided. I am researching and writing this to help disabuse myself, my loved ones, and anyone else interested, of false ideas about the two parties’ past relative economic records. It is not meant as a prediction of how things will play out if either party forms the next government. However you plan to vote, thanks for taking the time to explore verifiable facts this election.


So. Is there evidence the BC NDP mismanaged the economy during their time in office? How could we even tell? I could try just pointing at academic discussion papers* or good economic journalism*, but I wanted to see for myself. Truthfully, I’m not sure exactly what people even think they mean when they say the BC NDP mismanaged the economy. But I really want to know, so I explore a variety of metrics. I first look at GDP and GDP per capita.

 

Detailed analysis, Part 1: GDP / GDP per Capita

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