Lekstrom describes challenges facing region: health and balancing the provincial budget
Mike Carter Chetwynd Echo
CHETWYND – Blair Lekstrom was the special guest at a luncheon event hosted by the Chetwynd Chamber of Commerce at the Pomeroy Inn and Suites, Dec.12.
In what will be one of his last visits to Chetwynd before he succeeds his post as MLA, the Peace River South representative described two challenges the region faces in providing healthcare services and recruiting health practitioners.
Lekstrom also spoke to the strong economic gains to be made from the natural resources the region has available and the Liberals promise to balance the provincial budget by the end of 2013.
He described Northeastern BC as “the economic engine of the province,” touting a variety of factors that included the resurgent coal mining industry, the forest industry in Chetwynd and the abundance of natural gas that will “secure our future here in this region for decades to come.”
“Chetwynd, you are on the cusp of something that our region hasn’t seen,” he said, “I think our best years are ahead of us.”
Lekstrom has decided to step away from politics in May, not ruling out a return sometime in the future.
“I wouldn’t stand before you today and tell you that over the last 11 and a half years we haven’t made mistakes as a government, we have,” he said.
“…If you look at where our province was in 2001, and you look at where we’re at today, I think you would be hard pressed to say that we’re not better off. We have more jobs, our economy is moving along and we have a significant amount of investment.”
When elected in 2001, Lekstrom and the Liberals began paying down debt and meeting with financial institutions.
“We finally got to a point under a balanced budget that they started raising our credit rating and that we are now a AAA credit rating which means we have tens of millions of dollars of additional money that doesn’t go to debt repayment, but rather, goes into our social programs and healthcare,” Lekstrom said. Despite these early successes, the province has again built up a sizeable debt. In the province’s second quarter report issued in November, it was announced by Finance Minister Mike de Jong that British Columbia’s projected deficit had risen by another $328 million.
The province now expects to run an overall deficit of $1.47 billion. Lekstrom is hesitant to agree with Premier Christy Clark and Finance Minister de Jong’s latest promise to reach a balanced operating budget in 2013-2014.
And with an election coming in May, even more questions are raised about that possibility.
“I will not stand here and tell you that I am very comfortable with that as a 100% guarantee,” he said.
Adding to the complexity of the balancing act, Moody’s, a prominent investors service, announced hours before the Lekstrom luncheon that it had downgraded BC’s financial outlook from stable to negative.
While the province will maintain its AAA credit rating, the Liberals will no doubt leave the next government in a tight fiscal position.
“In its 2012-2013 budget, the province reaffirmed its plan to reach a balanced operating budget in 2013-14,” Moody’s explained.
“Should the provinces fiscal plan come to fruition, the province’s debt burden is expected to increase moderately to approximately 94 percent of revenues in 2014-15, a relatively high level compared to other AAA sub-sovereign peers.”
Jennifer Wong, Moody’s Assistant Vice President and lead analyst for the province described the rationale for a ratings downgrade by referring to a “softened” economic climate, weak natural gas prices and current government expense commitments.
“The negative outlook reflects Moody’s assessment of the risks to the province’s ability to reverse the recent accumulation in debt…” she said.
Moody’s specifically refers to natural gas, saying, “… lower-than-anticipated natural gas resource revenues, along with continued expense pressures presents risks to achieving the fiscal plan and to stabilizing and ultimately reversing the recent debt accumulation.”
Lekstrom agreed, saying that he sees the weak natural gas prices as a major concern. The price of natural gas is measured in British Thermal Units (BTU), with one BTU being equal to 0.1198 US gallons.
The current price of natural gas as of Monday was $3.36 per million BTU, which was a far cry from the $12 seen before the recession of 2008.
“For every one dollar of change in what gas sells for; it means $100 million to our treasury… so it’s a challenge,” Lekstrom said during the luncheon.
Despite these prices, he still sees natural gas, specifically liquefied natural gas (LNG) as having a great potential to open up opportunities in the Peace Region.
The Conference Board of Canada released its analysis Monday of the natural gas industry, saying it expects the industry to add more than $1 trillion to Canada’s economy over the next 24 years.
Demand for natural gas is expected to double between now and 2035, and much of that demand is to be met by Alberta and BC, with the Northeast playing a key role.