February 9, 2009

British Columbia unveils its stimulus package

RICHARD GILBERT

staff writer

The B.C. government plans on investing up to $14 billion dollars on the construction of infrastructure projects over the next three years, in order to counteract the negative impact of the global recession.

“We will be investing in needed infrastructure projects across the province to help create jobs, stability and confidence during this challenging time for the global economy,” said B.C. Premier Gordon Campbell during a recent economic summit in Vancouver.

“Last October, I said we would look at ways to accelerate projects in the coming months and years. We have identified $2 billion in project acceleration that we intend to pursue as quickly as possible, including hundreds of millions of dollars to be launched in the next 90 days.”

As part of a plan to help revive the flagging economy, the provincial government hosted a two-day economic summit.

It was attended by Campbell, cabinet ministers, national and international speakers, as well as representatives of the B.C. Construction industry.

“Everybody knows we are in the midst of a serious economic downturn,” said Keith Sashaw, president of the Vancouver Regional Construction Association during the second day of the summit.

“The recurring message of the summit is that we are going to get through the recession. We must prepare for the recovery and make sure that the infrastructure and the people are in place, so we can fire on all cylinders as soon as possible.”

To kick-start the economy and create jobs, the government plans to spend between $500 to $600 million in the next 60 to 90 days.

“There is a general agreement at the summit that the stimulus package is necessary at this point in the economic cycle,” Sashaw said.

In addition to this initial investment, another $2 billion will flow into new accelerated capital projects to be cost-shared with the federal government over the next three years.

“The challenge for the government is to get these projects out,” explained Philip Hochstein, president of the Independent Contractors and Businesses Association.

“This will create a lot of jobs for people who would otherwise be out of work. The words government and fast usually don’t appear in the same sentence.”

According to Sashaw, Campbell said there is a need to make sure the process works and projects are completed in a timely manner.

Campbell said he would be pushing the federal government to provide B.C.’s share of the $40 billion infrastructure fund so these projects can get underway quickly.

“There are a lot of projects and government agencies that need to be involved to make this happen,” said Hochstein.

“The goal is right, but the problem is implementation.”

Hochstein is also concerned that the accelerated government spending may affect the procurement process.

“I hope the need to get these projects out fast does not compromise the principles of fast, open, transparent and inclusive tendering,” he said.

The government announced that it would have to run budget deficits for the next two years to implement a fiscal stimulus plan, in order to respond to a decline in provincial revenues without cutting social spending.

“A deficit is not something that the government should not enter into lightly, but given the economic situation it makes sense in terms of delivering these programs,” said Sashaw.

Hochstein agreed that the economic situation requires a break from the governments previous position on budget deficits.

“I don’t think any business is happy when the government runs a deficit, but these are unusual times that require unusual measures” he said. “We should not let ideology get in the way of a pragmatic solution. It (the deficit) will have to be for a short period of time and there will have to be a plan to get out of it.”

Campbell’s Liberal government passed a law requiring balanced budgets soon after taking power in 2001.

To implement his fiscal stimulus package, Campbell is recalling the legislature to suspend the balanced-budget law for two years.

Currently, there are $10.6 billion in approved capital construction projects within the government’s capital plan for the next three years.

As well, the government plans to spend $1.4 billion in local infrastructure projects in partnership with local governments and the federal government.

With $2 billion in accelerated infrastructure projects, the government plans to spend nearly $14 billion in the next there years.

The combined impact of the new infrastructure investment could create more than 50,000 direct jobs as well as about 27,000 indirect jobs.

Campbell did not provide any details about specific projects, but said the government would invest in housing for seniors, First Nations and the homeless, as well as transportation, health care and education.

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