By Economist Erik Andersen
It is unfortunate that the government exploits the public’s ignorance of finances. We know that BC Hydro abuses the privilege of using regulatory accounting. Carrying $6 billion of uncollected expenses as a asset is an insult and the former Auditor General more or less told them so. Prior to 2003 the NDP had BC Hydro clear off all unpaid/collected expenses each year with rate changes. Back in 2005 I had occasion to talk with a BC Finance Ministry retiree. She confirmed my suspicion that they were under heavy orders to capitalize as much as was possible. That order must have kept hundreds of millions out of the current year accounting records and now shows up as long-term liabilities and “Contingencies and contractual obligations”.
The so-called balanced budget has only been achieved by delay, spending suppression or hiding contractual liabilities. This is a form of Enron off-balance sheet accounting, that for the first time ever, caused the independent auditor to title their opinion with a new term. BC Hydro did not deliver an annual “audited” report.
KPMG must be getting uncomfortable having to not require BC Hydro to report IPP contracts as long-term liabilities, even though John Doyle wrote to me that these contracts did not comply with the definition of “debt”.
My view about Site C is that it will come to a whimpering halt simply because the Liberals have flown BC into a financial “coffin corner”. If the NDP wins the election this year Moody’s will have the opportunity to hit the BC credit rating down-grade button, thereby making the NDP the goat.
Yes, it is a joyful time but, as Pres. Trump’s PR guy says, there can be alternative facts and some folks deal in them all the time.