Hardly a day goes by without a good news announcement from the legislature. The release of The Second Quarterly Report was no different; BC is on track for a record $2.244 billion surplus. Finance Minister Gary Collins appears to have slain the deficit dragon and the accompanying red ink from the government's books.

However, the next step on the road to fiscal recovery requires some foresight. The province's $37 billion debt has yet to be a top priority for this government. Granted, the most recent financial update shows a debt reduction of $814 million, but upon careful inspection, the report also contains a small but rather important caveat. After pages of positive economic indicators, triumphant remarks on the negligible decline in debt-to GDP ratio, the big "but" is tucked away on lucky page 13, "however should the government allocate some of this surplus to other areas, the debt forecast would change accordingly."

Hmm-those sticky fingers wouldn't have anything to do with the impending election, would it Minister Collins should be giving thanks to Ottawa for the fiscal room. Provincial coffers were given a healthy kick from Ottawa with an unexpected $805 million in equalization payments. Now, with over $2 billion at their fingertips, the temptation to spend is unbearable for a government trying to re-make its image during an election year. Taxpayers should be concerned that their money will get flitted away on program spending, government hand outs or election promises. All of these temptations push government expenditures up which inevitably stay that way even if the revenue source dries up.

Remember, the federal equalization payoff is a one time lump sum. BC will not be eligible for another $800 million as long as we remain in the 'have' status. As for the rest of the surplus, much of it is owed to the booming natural resource sector, renowned for its volatility. BC's burgeoning surplus is largely due to the luck of higher but unstable revenue streams, not trimming expenditures.

Instead of entertaining the Christmas list of the tax and spend crowd, Finance Minister Gary Collins should be using taxpayers' dollars to pay down the debt that grew under his watch. When the Liberals came to power, the province's debt stood at $33.8 billion. If the government does indeed apply the forecasted $814 million to the debt (highly unlikely), the debt will still have grown $3.138 billion since 2001.

While struggling to get to a balanced budget for 2004, the Liberals neglected the debt, treating it as an afterthought at the end of the fiscal year. Consequently, the debt ballooned, and now it costs taxpayers more than $3.8 million a day just to service the debt.

That's money not going towards tax cuts, health or education. Managing the debt is not enough; the government needs to have a debt retirement plan. Alberta legislated a debt repayment plan and next year it will be debt free.

The Canadian Taxpayers Federation (CTF) has been advocating mandatory debt repayment. The CTF's pre-budget submission proposed a modest 2.5% own source revenue (all revenue less federal transfers) or 75% of the surplus, which ever is greater, be applied to the debt each year. The proposal puts debt repayment back into government budgeting rather than a year end afterthought. The current practice applies the unused forecast allowance, contingency fund or ministerial budgets toward the debt. It isn't working. It hasn't managed the debt or kept it from growing. A more aggressive and committed process needs to be adopted if taxpayers are ever going to escape wasting tax dollars on interest payments. Now is the time to do it, while the province is in a surplus position.