Latest fiscal update shows BC Liberals’ economic policies in serious disarray
What happens when a government relentlessly cuts corporate tax rates? The public treasury ends up in the red. That's part of what has happened in BC, but to hear Finance Minster Kevin Falcon talk about it, the obvious math seems strangely mysterious to the Minister. He searches far and wide to try and explain that it wasn't his government's policies that have led to the fiscal problems that he outlined in late November, but rather "other factors" somehow beyond his control.
The blunt truth, however, is that for the last eleven years Mr. Falcon and his Cabinet colleagues have followed the voodoo economic game plan of his former boss, Gordon Campbell. That game plan had a simple goal; cut taxes and justify the cuts as a way to stimulate the economy. The simple plan would "pay for itself" Campbell asserted, an assertion that eleven years later looks not only vacant, but when viewed in its cumulative effect, downright destructive.
BC's corporate sector, along with BC's wealthiest individuals, has reaped a tremendous gain from the tax cut regime. The corporate tax cuts alone have resulted in close to $8 billion of foregone revenues to the provincial treasury over the period 2001-2010. That Mr. Falcon would now puzzle about why the provincial treasury may be $3 billion in the red is an indication of either his inability to understand the underpinnings of his portfolio or his desperate attempt at damage control within a government that is steadily losing its grip and the public's trust. Either way it's time for a change in Victoria.
As unpalatable as his government may find it, it's time for meaningful tax reform in BC. As Mr. Falcon prepares to table his next provincial budget in February 2012 he should consider the following. Start by reversing the corporate tax cuts that he said would help grow our economy. They haven't done that. Instead, they have starved the provincial treasury of the resources needed to pay for services, services that citizens expect their government to provide. Next, the Minister should reverse the high- income tax cuts that have disproportionately favoured BC's wealthiest individuals. Between those two changes, BC would be put on a path to balancing its books in ways that work for all of us.
One final point: Mr. Falcon should stop picking fights with BC's public sector workforce. They deserve a wage increase. Without their skills, hospitals don't work, roads don't get repaired, seniors don't get help and kids don't get an education. "Zero mandates" only guarantee frustration within the ranks of BC's public sector and, ultimately, undermine the services that these people want to provide.
Post-secondary educators are very much a part of that equation. Our members have the same frustrations with chronic underfunding of their institutions and the government's steadfast refusal to pay a fair increase at any provincial bargaining table. We can't afford to follow that path any longer and the sooner Mr. Falcon gets that message the better off our province will be.
The Federation of Post-Secondary Educators of BC is the provincial voice for faculty and staff in BC teaching universities, colleges and institutes, and in private sector institutions. FPSE member locals, represented by Presidents' Council and the Executive, represent over 10,000 faculty and staff at 18 public and 12 private sector institutions.