…… in a magic kingdom called British Columbia, the government of the land could spend as much as it wanted without having to give any thought to where the money to pay for everything was going to come from because the government could ‘find’ money whenever it wanted to.

All the citizens of this land were overjoyed that they did not have to pay (as do the unfortunate citizens of lands that exist in the real world) for the ever increasing services and perks the citizens, with their insatiable appetite for more health care, more hospitals, more salary, more perks…..more……more……more…..,  demanded their government provide to them.

Anytime the government of the Kingdom wanted to spend money on something, the MLA’s merely needed to walk through the garden of the castle called Legislature and pick up the money that had fallen off the money trees growing in the garden or visit the basement of the Legislature and exchange the gold that the little man Rumpelstiltskin had spun from straw or pluck the gold eggs from the nest of the goose who lays gold eggs.

One group of citizens, Teachers, were so enamoured of the government’s ability to ‘find’ money without limit, they felt it  reasonable to demand a 22% wage increase – plus a host of expensive perks and changes to schools. To support their fatuous salary demands, the Teachers spread the tale of the government’s magical ability to ‘find’ $$$$ whenever the government wished, throughout the airwaves of the land.”

Unfortunately for the citizens of BC they reside in the real world – despite politicians of all stripes and parties (Liberal, NDP, Conservative) telling voters the fairy tales voters, who insist on living in the land of ‘Wilful Denial of Reality’, demand to be told in order to give the politicians what they want – political power.

In the real world neither fairy tales nor wilful denial prevents the outstanding bills and debts from – at some point in time – coming due……as the outstanding bills and debts are now doing in Greece.

The problem is not with the teachers telling a fairy tale, or with the perversion of fairy tales from teaching a lesson about life to fairy tales as a way to enable wilful denial of reality.

The problem is that the advertisements and statements from teachers and their representatives evidence the teachers belief in the fairy tale they are telling.

Providing a little understanding as to why, despite the hundreds of millions of $$$$$ taxpayers pour into education, students are getting a 4th rate education. An education that leaves students in BC functionally (or actually) illiterate in English and Mathematics, lacking even the most basic skills in logic and problem solving or the ability to analyse what has occurred or attain an understanding of the consequences and/or implications flowing from events.

With the teachers demonstrating their inability to analyse, use logic, problem solve, research and understand what is, as opposed to seeing the fairy tale land they want to see, it should surprise nobody that the product (graduates) of the BC school system lacks these skills. Or that students of the BC school system cannot use the English language or Mathematics in a functional or useful manner.

As ‘proof’ of the existence of their fairy tale land of unlimited plenty the teachers point to the $600 million the government spent on the new roof on BC Place.

A comparison of the proverbial apples to oranges as the BC place roof is a capital project representing a one time (admittedly large, but that is the nature of capital projects) expenditure and teachers salaries, which are operating expenses that need to be paid every year, not one single time.

The teachers also either ignore or fail to understand that operating expenses such as wages, suffer a compounding effect as the starting point of future contracts and increases is the current contract negotiated.

The biggest problem is that the teachers ignore where the provincial government had originally found the $$$ (and what happened to those $$$) – accepting Ottawa’s offer of $1.6 billion to harmonize the PST with Ottawa’s GST.

And we all know, or at least should know, how that worked out.

The citizens of BC voted to continue their state of wilful denial and extinguish the HST – a demonstration of a lack of the skills required to evaluate and understand the consequences extinguishing the HST would have on provincial finances and the ability of the BC government to deliver services to citizens.

I am assuming the decision was due to a lack of skills to understand the consequences of extinguishing the HST and not to the desire to force the government of BC to reduce the services delivered to BC citizens or a lack of mental capacity or insanity.

See “Think. Think. Think.”  for an analysis of the consequences flowing from extinguishing the HST.

There are delicious ironies in the karmic balance of the government literally having no money to raise teacher salaries.

Irony that the product (graduates) of the BC school system, of the teachers teaching, lack the ability to analyse, use logic, problem solve, research and understand the extensive negative financial consequences of extinguishing HST. One of which is a reduction of the funds the province has to provide services to the people of BC. Which results in not only no money for increases in education costs such as teachers salaries and smaller classes, but puts the government under pressure to find ways to reduce or ‘reallocate’ spending on  education.

Irony that the teachers and their union are supporters of the NDP party, which spent months travelling the province publicly supporting and working to extinguishing the HST. The ‘success’ of which meant there are no funds available to increase spending on education. Actually, this irony applies across the entire government employees union.

Irony in the strong probability that numerous teachers voted to extinguish the HST, voted to place the government in a financial position where there is no money to be able to afford increasing teacher’s salaries or spending more on education.

Irony that voters acted in such an egregious and childish manner as to ‘damn reality or the consequences, threw a temper tantrum and extinguish the HST in anger’ – rather than acting like adults; taking the consequences of throwing a temper tantrum versus a reasoned response into consideration.

Irony in that childishness being reflected in the teachers rushing to get on strike before the government introduces and passes legislation imposing a settlement. Three days of being on strike that will accomplish nothing since the final outcome of the matter will be the same strike or no strike. The only ‘accomplishments’ of the teachers strike being the inconveniencing of parents and more negative consequences for students – in particular those who graduate this year. Although, the strike will make available to government the savings achieved from not having to pay 3 days of teachers wages.

Irony in the teachers, whose job is (theoretically at least) to impart knowledge, clinging in wilful denial to the fairy tale world in which the government has (in effect) access to money trees or Rumpelstiltskin or a goose laying gold eggs. Because it is only in that fairy tale world can teachers demands be met. In the real world there is no money and the teachers are SOL.

From the Tao of James:

Reality does not care what you want to be fact, reality does not care what you believe to be fact, Reality simply is what IS

The bottom line, the real world Reality, is it that until teachers are turning out well educated, well rounded, well prepared to deal with the real world product (students) – teachers salaries should be going DOWN, not up.

There are good reasons that Think Think Think is an Alanon slogan. Primarily, that not thinking things through, failing to carefully use thought to achieve an understanding of what the REALITY of the issue being decided IS and what the consequences of the choices that flow from that reality are, is how you find yourself sinking in the financial quagmire that BC, through its choices and actions, finds itself in.

Continuing to fail or to refuse to think or to consider reality and burying our heads in the sand of wilful denial is how you end up a financial disaster like Greece.

Or, as voters in BC did in June 2011, voting to reduce the services the government of BC (health care, education, etc) provides to citizens of BC by $300 million a year for the next 5 years.

Reducing services by $300 million a year may not be what voters intended to do when they voted to extinguish the HST. But by failing to invest the time and effort required to achieve an understanding of the HST and the consequences of extinguishing the HST, then voting to extinguish the HST, voters voted to reduce services provided by the BC government to citizens by $300 million a year for the next five years.

In order to understand how, in voting to extinguish the HST, voters were voting to reduce government services by $300 million a year for 5 years let us review the history of the HST in Ottawa and Victoria.

In late 2009 and early 2010 the BC Liberal government found itself in need of $458 million ($600 million final bill) to replace the roof on BC Place and a $billion$ or $two$ to replenish government coffers depleted by spending on the Olympics.

In Ottawa the federal government had just wrapped up its negotiations with Ontario as to the size of the bribe, I mean compensation, Ontario would receive from Ottawa to cover the costs of harmonizing Ontario’s sales tax with Ottawa’s GST.

With Ontario on board to bring in the HST, Ottawa turned its attention to getting Quebec and BC to harmonize their sales taxes with the GST; offering Quebec and BC $1.6 billion bribes, ahem – compensation, to bring in the HST.

Cash strapped as a result of Olympics costs and facing the need to pay for the new BC Place roof, BC’s Liberal government agreed to accept the – compensation – offered by Ottawa and bring in the HST.

When the BC Liberal government announced they would be bringing in the HST the citizens of BC jumped to the conclusion that the Liberals had lied during the provincial election, during which the Liberals had said they would not be bringing in the HST. With citizens citing the fact that politicians “ALWAYS” lie as ‘proof’ that the Liberals knew at the time of the election they would be bringing in the HST.

As to the matter of politicians lying. Voters point their fingers and accuse politicians of ‘always’ lying as if voters have nothing to do with politicians behaviour. For decades voters have been wilfully denying the Reality of what IS the state of affairs in BC (and Canada), wilfully denying the implications of the Reality of the state of affairs and the consequences that would (have to and do) flow from ignoring the Reality of what the state of affairs IS –  in favour of what voters WANT to be the Reality of the state of affairs.

In choosing to dwell in wilful denial, voters rewarded those politicians who told them what they WANTED to hear and punished any politician who dared to speak of what voters NEEDED to hear and consider. Only wilful denial would cause someone to be surprised that after decades of this behaviour, politicians now tell voters what voters want to hear – saying whatever is required to avoid telling voters anything that voters do not want to hear.

‘Politicians lie’ because voters have voted anyone who does not lie – particularly those who insist on addressing the Reality of the issues facing our cities, provinces, territories and country – out of office and out of public life. Thus voters themselves have voted to have politicians lie to them. A situation allowing voters to avoid facing financial Reality.

In the scheme of things it doesn’t really matter what Campbell and the Liberals knew and when they knew it, they had no choice but to say yes. Given the financial state of affairs in BC it would have been financially irresponsible not to take the $1.6 billion from Ottawa – and the additional revenue the HST would generate.

Feeling they had been lied to (ignoring their own culpability for politicians use of doublespeak to avoid telling voters what they don’t want to hear and to instead tell voters what they want to hear) voters condemned the government for implementing the HST.

Presented with the opportunity to exact a pound of flesh from Campbell and the Liberals – whose existence, by presenting an alternative to the NDP, led to the demise of the Social Credit and Bill Vander Zalm’s notoriety as the leader who killed the BC Social Credit Party – Bill Vander Zalm jumped on the anti-HST bandwagon and helped propel the issue to referendum.

While the political fallout suffered by the Liberals and Gordon Campbell’s resignation no doubt  were very satisfying to Vander Zalm, his actions in helping to extinguishing the HST have resulted in painful financial consequences and the financially driven need to reduce government services to citizens.

In an ironic twist of heroic size, Vander Zalm’s action put Gordon Campbell in London England as Canadian High Commissioner and allowed him to exit BC politics as the leader who lead the Liberals into power and left the Liberals in power with a majority. It also allowed Campbell to exit before financial realities began to place tighter and tighter constraints on what a BC government can do, what services it will have the revenues to supply and the need to cut services.

Which would have me, if I was in Mr Campbell’s shoes, enjoy a very merry last laugh.

Either Vander Zalm, sensing blood in the water, seized the opportunity to inflict a wound on Campbell and the Liberals OR Mr Vander Zalm is notably intelligence challenged. The implication, should Mr Vander Zalm possess a minimal level of intelligence, is that Mr Vander Zalm wanted his pound of flesh so badly he did not care how much financial damage extinguishing the HST of the fiancés of BC.   

Presented with the opportunity to score political points the NDP leaped on the bandwagon of a referendum and extinguishing the HST. Campaigning to reduce government revenues, even as the NDP called for the government of BC to spend hundreds of millions of dollars more on healthcare, education and other voter wants (as opposed to needs).

We are faced with another either. Either the NDP want power, to form the government of BC, so badly that they will do and say anything – no matter how much financial damage their actions inflict on the finances of BC OR the NDP are so financially incompetent that they see no conflict in advocating ripping $1.6 billion out of the finances of BC (giving it back to Ottawa), reducing sales tax revenue by extinguishing the HST – and being able to spend hundreds of millions of dollars more on healthcare, education etc.

When voters exercised their right to extinguish the HST in a fit of temper, they surrendered their right to demand increased services from the government and surrendered any right to expect the same level of services from the government. Because in choosing to extinguish the HST, voters chose to reduce the dollars the government has available to purchase services (healthcare, hospital beds, classrooms).

Of course, living in wilful denial the voters of BC simply refused to acknowledge they had voted to reduce the funding available to the government to purchase services. The day after voting to rip $1.6 billion out of BC’s finances and to reduce government sales tax revenue voters were once again demanding more, more, more, more.

Which is how we arrived at the financial state BC is in today.

In light of the reality that Ottawa transfers more than $1.6 billion to BC every year, not repaying the money to Ottawa was not an option. Thus the BC government found itself forced to negotiate the repayment of the $1.6 billion over the next 5 years. Borrowing the $1.6 billion, and repaying Ottawa immediately was also not an option as it would have caused BC’s credit rating to be downgraded – pushing interest rates and the cost of servicing the provinces debt up.

Given the effect of debt levels on the provinces ability and cost to borrow; the sputtering state of the economy; the uncertainty of the economies around the world; voters refusal to pay to cover the cost of the services they demand (and receive) from the government: the funds available to the government of BC to purchase and pay for services for the citizens of BC will remain approximately what was available in the 2011 – 2012 financial year.

What does that portend for BC and its citizens over the next five years?

The monies available to purchase services for citizens will, for the next 5 years, be reduced by $300 million. In other words, in order to repay Ottawa the government of BC will have to reduce the services it provides to citizens by $300 million a year or manage to raise $300 million extra to offset the repayment to Ottawa. This is one of the consequences of voting to extinguish the HST.

Healthcare costs consume the biggest piece of the provincial budget. Unless – miraculously – the cost to purchase the same services next year as purchased this year remains the same (for the first time ever), the province will need to increase spending on healthcare  – just to hold services provided at the same level of services as this year.

People demand new operations, procedures, drugs, equipment, hospitals, hospital rooms, etc and ask why they are not available. Simple – no budget for these services means there is no money to pay for these services, ergo no services.

Healthcare was estimated at $15.7 billion for the 2011 – 2012 fiscal year. Over the past decade healthcare has increased 6.4% a year on average. Which leaves the government needing an additional $1 billion to pay for health care in the 2012 – 2013 fiscal year.

With the money cut from the budget by extinguishing the HST and no significant increases in revenue where will the money come from to pay for healthcare? or education? the courts?

Reality: if there ain’t no (enough) money, their ain’t no (the desired level of) services.

The report prepared on what Ontario will need to do to avoid becoming the first Canadian political jurisdiction to become a ‘Greece’ included pegging annual healthcare funding increases at 2.5% even though cost increases are running at 5%. In other words Ontario is faced with being forced to cut healthcare services provided to citizens because it has failed to keep its financial house in order.

Healthcare, Education, Justice system are all poised to devour substantially more dollars. But the dollars to pay substantially more for Healthcare, Education, Justice System do not exist.

Mr Dix can demand the government spend hundreds of millions, a billion of two, more dollars on healthcare, education and the courts. It will no doubt win the NDP points towards winning the next election. But no matter how hard Mr. Dix huffs and puffs……his demands are meaningless, pointless grandstanding when the money cupboard is bare.

With the government limited in the amount that it can borrow (without the cost of borrowing reaching levels where the more you borrow the less dollars you have to spend) and without significant increases in revenue, Financial Reality is threatening to force citizens out of their state of wilful denial and face to face with financial reality.

BC can begin to set priorities, begin to chose what we spend our limited funds on (healthcare versus pointlessly locking more and more people up), begin to acknowledge reality and make rational decisions based on what IS rather than what we BELIEVE or WANT to be.

Or we can bury our heads more deeply in the sands of wilful denial until suddenly we find ourselves on the international news as the latest political jurisdiction to have hit the Greece’d plunge into financial hardship and a bleak future for citizens.