Monday, December 03, 2012

British Columbia's Big, Bold Budget Deficit...


...Is It Really Being Caused By A Recent Tumble In Natural Gas Prices?

Norm Farrell thinks not.

In fact, he has graphs and everything which indicate that there has been no tumble:

...We've been hearing for months from BC Liberals that revenue from natural gas production is sharply reduced in the current fiscal year. No doubt the public share is reduced but we should be asking why.

I suggest there was a political decision to relieve gas companies from payments they would otherwise have been obliged to make.

In the current fiscal year, sharply lower government revenues do not result from lower gas prices earned by the industry. Here is a chart of natural gas prices in the first half of the current fiscal year (ie. since the original much rosier original budget forecasts were made)...

Go read Norm's entire post.

Because he's got this one really nailed to the floor (think 'subsidies')....

(and his work reinforces the likelihood that a massive chunk of this deficit will suddenly disappear in, say, oh I dunno, February)


1 comment:

cfvua said...

The geniuses in fiscal control that negotiated the obviously over generous "royalty credit" subsidy programs need to wear this one totally. And that includes every elected liberal since 2001. This tops the money that vaporized when BCRail was given away. And nothing is being done to eliminate the programs either. Any prospective new government will do 2 things. BC Rail inquiry full scale and eliminate subsidies to natural gas producers.
Same people told us goods would be cheaper as a result of HST. We all know how that went. And they are probably wondering why they are scheduled for replacement.