Opposition New Democrats say B.C. income assistance estimate off by $100 million
Published Thursday July 9th, 2009
VANCOUVER, B.C. - Government documents reveal the number of British Columbians expected to receive income-assistance could climb to 147,000 by next June, a figure the Opposition has calculated will leave the government $100 million over budget.
But the New Democrat figure isn't even close to the estimate from an economist with the Central 1 Credit Union, who calculates the Liberal government's deficit for this year could reach $1.5 billion.
NDP social development critic Shane Simpson unveiled the leaked government document Wednesday. The document, a PowerPoint presentation compiled by the Ministry of Housing and Social Development, suggests the employment assistance caseload will increase by 28 per cent within one year.
At $3.5 million for every percentage point increase, Simpson said the final tally will mean an end to the projected deficit Premier Gordon Campbell was telling voters about in the last election.
"Before the (May 12) election, Gordon Campbell promised to hold the line on a $495 million deficit without cutting services, but it's becoming increasingly clear that's not going to be the case," he said.
Housing and Social Development Minister Rich Coleman disputed Simpson's claim, however, and said the province can handle an uptick in welfare applications without the projected deficit being affected.
"I don't know yet (if the deficit will rise)," Coleman said. "At this point in time, I think we're pretty close to holding the line on that."
But Helmut Pastrick, chief economist for Central 1 Credit Union, had a far different interpretation of what the fiscal year 2009/10 will bring.
"I'd say the $495 million deficit will likely be exceeded. I'm looking at something on the order of $1 billion to $1.5 billion."
"Social assistance, income assistance, spending, does go up during recessions so that would be part of the rise," Pastrick said, though he added that his analysis focused more on sources of revenue than expenditures.
New Democrat finance critic Bruce Ralson also questioned if the Campbell government will be able to keep its promise.
"People all across the province are concerned that, despite the premier's election promises, there will be more deep cuts in the government's upcoming budget," he said.
"We've seen the signs of it already, from cuts to health care services in communities like Mission and Kamloops, to the government's decision to shut down a van providing late-night services to vulnerable women in Vancouver."
B.C.'s finance ministry is preparing an updated budget for Sept. 1.
Coleman stressed that British Columbians who qualify for income assistance will not be left deserted.
"Social assistance is there as a payer of last resort for people and it will still be there," he said.
"It's statutory by law that if a person qualifies for social assistance, we fund it."
He said if there's a budget pressure, it will be identified during the current budget cycle.
"If we're pressured at some point in time where our projections move up and down, then we have access to contingencies."
But Seth Klein, B.C. director for the Canadian Centre for Policy Alternatives, said those who enter the social assistance system will find it's certainly not that simple.
"There are some baseline rules about social assistance eligibility that do make it hard to get," Klein said.
He described the welfare asset rules as extremely restrictive and gave the example of a forestry worker who's exhausted his EI coverage.
"You would have to liquidate your RRSP's, sell your truck because your vehicle's only allowed to be worth 5,000 dollars before you can even apply for social assistance," Klein said.
"When you're in a recession and people fall on hard times and turn to the social assistance system, they will find a system that under its current rules is unable and unwilling to help them."
Under those qualifications, Klein questioned if the welfare caseload projections are anywhere near as high as they could be.
Simpson accused the government of freezing essential services to assist people in job searches.
"We've seen freezes in the areas of adult basic education, English as a second language, vocational assessments, and support for foreign credentials," he charged.
But Coleman said such freezes are common in the period following an election. He also downplayed the 147,000 figure, calling it a worst-case scenario.
"We know that we can expect maybe up to that number by next year. At the same time, if there's a shift in the economy, that number can be different," he said.
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