Photograph: Darryl Dyck, Canadian Press

The Gordon Campbell budget was released yesterday, but I needed a day to think about the impact of the announcements. Nothing really comes as much of a surprise, and the Liberals put the money into the two areas that they would have been crucified had they ignored: health care and education. But even in those areas there could be some improvement.

In some respects the budget is a restrained stimulus-free version that the federal government doesn’t have the political capital, or the political courage, to release on Thursday. Finance Minister Colin Hansen presented a budget with significant cuts to government workers, and tightened the belt toward a balanced budget, but not until 2013.

Although the targets are for 4,142 fewer government workers by that date, a 13% shrinking of the civil service, this budget is still one with record spending. With the September budget update that put the government in a deficit position of $1.6 billion, the province has been slowly letting go of people in the bureaucracy.

The Liberals had made numerous cuts to spending on the road to the Olympics, but that was to ensure that nothing got in the way of their Games glory. In August the government said it was forced to close 13.5 operating rooms in the Vancouver Coastal Health Authority from September of 2009 until the end of the Olympic Games in order to meet the challenges of their massive budget shortfalls. They postponed 5,800 surgeries in areas such as neurosurgery, vascular surgery, ortho trauma, ophthalmology and general surgery. They also reduced operating-room and hospital-ward staff by an estimated 112 full-time-equivalent jobs. And they cut 13 anesthesiology positions.

The perception of a struggling health care sector and strained education system left the government with no choice but to add spending to those areas. Expenses grew by $460 million since the last budget, including a further $105 million for school districts, $31 million for post-secondary institutions and $34 million for health authorities and hospital societies.

For all of the BC Liberals’ tough talk on no deficits, in which the Campbell government breached their own legislation last February, multiple deficit projections will accrue public debt by 2013 that will reach levels seen under the NDP in the late nineties.

Unfortunately, much of the increased spending in education doesn’t address the root problems that have caused record numbers of school closures in British Columbia and teacher layoffs during the past decade. Instead it’s going to a back-door universal daycare program for full-day kindergarten, and salary increases for teachers to keep the teacher’s unions happy. That means that school administrations will still be struggling with basic needs like transportation costs, increased Medical Services Premiums, and the expected hit from the July 1 HST.

According to Mr.Hansen’s latest forecast, B.C. will sustain deficits of $1.7 billion, $945 million and $145 million in the next three fiscal years, from 2010-11 to 2012-13, before returning to expected surpluses thereafter. That would bring B.C.’s public debt from $36.1 billion in 2001 to $55.9 billion by the end of the budget forecast, an increase of 35.4%. Moreover, that debt burden puts $14,300 per capita on B.C. residents, only $1,300 less than our per capita federal debt.

The other problem with the budget forecast is in repeating the mistakes of the federal government’s own optimistic revenue and growth forecasts. Mr.Hansen expects an annual revenue growth of 4.9%, but there’s little indication that British Columbia will continue to recover from the recession quickly enough to make that growth, or that the HST won’t throw a wrench into those plans. Not only will all HST revenue go into health care [no "stimulus" there], but the increased taxes on medical services premiums will also increase the tax burden on the base. The carbon tax is also slated to go up once again on July 1, the same day the HST will kick in.

And now that the Olympic party’s over, and the Liberal government became the photo-op beneficiaries of a record 14-gold medals performance by our athletes, they’ll be rewarding them by disowning the podium altogether.