In terms of sheer magnitude, the monkey business going on with BC Hydro's accounting practices may rank as the most misleading financial dodge ever performed by a B.C. government.
The province's independent financial watchdog - Auditor General John Doyle - recently blew the whistle on the deferred accounts being piled up by the Crown corporation.
Now, "deferred accounting" seems like a benign and dull topic, but the ramifications of this ongoing practice are potentially huge for ratepayers in the foreseeable future.
Not only that, but this kind of financial hocuspocus has allowed the B.C. Liberal government to mask the true state of its financial position.
And we're not talking chump change here. All told, BC Hydro has funneled $2.2 billion of expenses into those deferred accounts, and the total is expected to hit $5 billion by 2017.
In the 10 years the B.C. Liberals have been in power, the deferred accounts have ballooned from just over $200 million to more than $2 billion. Meanwhile, in that same timeframe, the government has taken more than $2 billion in dividends from BC Hydro.
In other words, the government has artificially improved its bottom line by billions of dollars. In this fiscal year alone, the deficit would climb by almost $450 million if the deferred account for the year was eliminated at BC Hydro.
The government has given the impression that BC Hydro's profitability has allowed it to be paid a hefty dividend every year when the reality is that the dividend was made possible only because a huge amount of expenses were simply deferred for payment at a later date.
The motive for this expensive sleight-ofhand appears to be that it prevents BC Hydro rates from increasing too quickly, which can be politically damaging for the government.
But the deferred costs still have to be paid back at some point, which means eventually hydro rates will have to increase significantly (on top of the increases that will come with or without deferred accounting).
Energy Minister Rich Coleman says he's confident the corporation will be able to pay down the accounts once big projects like the Site C dam are completed and more revenue is generated. We'll see.
This kind of jiggerypokery makes some of the financial hijinks that occurred during the NDP's time in power pale in comparison. The New Democrats were routinely accused of off-loading spending costs into areas not captured by the provincial budget, but the money involved there doesn't come anywhere near the $5 billion this particular scheme will eventually cost.
In fact, if the NDP had tried something like this while in government, the B.C. Liberals would have been apoplectic with rage. While in Opposition, the B.C. Liberals constantly tried to portray New Democrats as economic incompetents and wrapped themselves in claims of tremendous superiority on any economic issue. But the longer the B.C. Liberals have been in power, the more the lie is put to those claims. The B.C. Liberals' track record is actually quite spotty on this front.
For example, there have been numerous and huge budget deficits posted by the B.C. Liberals, while the government's incompetence destroyed a tax policy shift - the HST - it insisted was vitally needed by the province.
And the province's total debt is approaching $60 billion, almost double the amount when the B.C. Liberals first came to power. Throw in the Boss Power fiasco, which saw $30 million paid to a company for not developing a uranium mine, and it all adds up to quite the opposite of a thrifty and transparent government.
LEFT CAUSES TROUBLE FOR LEFT AT VOTE TIME
Another political irony may be taking shape in the Vancouver municipal elections. The Occupy Vancouver crowd, which appears to support a hodgepodge of assorted left-wing policies, has become an issue in the election in that city.
As managers of the city, Vancouver Mayor Gregor Robertson and his Vision Vancouver council are finding themselves in a tight spot. Mayoralty candidate Suzanne Anton and the NPA have effectively, if unfairly, aligned the Occupy gang with Robertson and Vision in the minds of many.
If public frustration and annoyance with the Occupy crowd grows - or if it turns into a nasty riot if the police move to forcibly end the protest - they may wear much of the fallout.
While Robertson himself seems to be a safe bet for re-election, it will be ironic indeed if a left-wing protest ends up costing even a couple of left-leaning Vision candidates victory at the ballot box.
Keith Baldrey is chief political reporter for Global BC.
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