VICTORIA — Since winning the last election on a promise to make the province debt-free, the B.C. Liberals have balanced the budget for program spending and slowed the rate of growth of borrowing for capital projects.

Still, even that modest progress was challenged recently by the Business Council of B.C., which called on the Liberals to postpone their drive in favour of borrowing more to pay for infrastructure and stimulate the economy.

“While prudent fiscal management is highly desirable and is something that sets B.C. apart from some other Canadian jurisdictions, there are advantages in having some flexibility around public investments in large capital projects, notably those that promise to pay significant economic dividends,” observed the council in a white paper on infrastructure policy and financing, released last week.

“The current economic climate represents a uniquely opportune time to invest in large-scale infrastructure,” the paper went on to say. “B.C. has the third-lowest net debt-to-GDP ratio among the provinces and a debt burden that is easily manageable by international standards. In relation to the size of the economy, the province has scope to borrow additional funds for infrastructure projects should the government decide to do so.”

Hence the paper’s recommendation that “in light of historic low borrowing costs and B.C.’s modest debt-to-GDP ratio,” the Liberals should “explore the potential to ramp up capital spending on priority infrastructure projects over the next two to three years.”

Notwithstanding the council’s characterization of the current debt-to-GDP ratio as “modest” — it is about 18 per cent for direct debt, 26 per cent including BC Hydro and other ratepayer-supported crown corporations — the Liberals have already incurred a great deal of debt for infrastructure since taking office a dozen years ago.

As of the March 31 end of the last budget year, the Liberals under premiers Gordon Campbell and Christy Clark had added $28 billion in capital debt — $6 billion to build schools, colleges and universities; $4 billion for hospitals and other health care facilities; $1 billion on housing and public buildings; $9 billion on highways, bridges, transit lines and other transportation infrastructure, and $8 billion rebuilding and upgrading the BC Hydro network of dams and transmission lines.

Looking ahead, the council noted that the Liberals are proposing to reduce capital spending (mostly borrowed) from $6.6 billion in the current financial year to $5.3 billion two years from now.

Instead, the council would keep spending at the current level or even increase it, allowing the debt-to-GDP ratio to rise as well. End result would be about the same ratio as the Liberals inherited from the New Democrats on taking office a dozen years ago.

The white paper went on to mention a number of as-yet unbudgeted possibilities for borrow-and-spend. Replacements for the Massey tunnel and the Pattullo Bridge. A North Fraser Perimeter Road to match the one recently completed on the south side of the river. New rail bridges at New Westminster and across Burrard Inlet. Continued widening of the Trans-Canada from Kamloops to the Alberta border. New transit lines in the Lower Mainland. New ferries and expanded ferry terminals.

The council did not attempt to dictate priorities, however. Instead it urged the province to “develop a comprehensive strategic plan for infrastructure,” patterned on a rolling 10-year version being implemented by legislation in Ontario.