No matter the city, province or country, if you want to turn up the political temperature, tax hikes are one of the most direct routes.
But even in a province with such angry politics as British Columbia, it’s remarkable to see a cabinet minister cancel a town-hall meeting, citing safety concerns on the legendarily mean streets of Point Grey.
But we’re not here to question the validity of those safety concerns or the complaints of those protesting. We’re here to ask why we’re talking about tax hikes at all.
Among the new measures introduced in February’s budget, the speculation tax, schools tax and employer health tax attracted the most attention. The NDP claims most (but not all) British Columbians will come out ahead in the wash, but there’s no arguing that some (but again, not all) employers and homeowners will take a pretty big hit.
The governing NDP, kinda-sorta-governing Greens and opposition B.C. Liberals agree on one thing: The provincial economy and coffers are in robust health. Last month, Standard & Poor’s affirmed British Columbia’s triple-A credit rating. In fact, we’re the only province in Canada with all three major rating agencies’ highest rating.
It’s the kind of fact previous B.C. Liberal governments touted, and many NDP supporters rolled their eyes over, denied or studiously ignored. (Once, I was told it was a Zionist plot. Or ploy? These things get hazy.)
To their credit, in government the NDP has done an about-face on ratings. You can argue with the methodology, or even whether the means to achieve and maintain a good rating are “worth it.” But the fact is, they matter. A lower credit rating can mean millions or even billions more spent on higher interest payments, instead of all the good stuff such as roads, schools and hospitals.
Last year’s budget surplus was $2.8 billion — the highest surplus inherited by any incoming government in Canadian history. At the time, now-finance minister Carole James said the surplus reflected the B.C. Liberals’ “unbalanced approach” to the economy. In other words, yes, great, there’s a surplus, but what good does that do for the average guy?
That’s a defensible position. And you’d expect it to be a prelude to a raft of new spending on programs and initiatives to help said average guy.
Instead, there was a raft of tax increases. Again — why?
There are three possibilities.
The first is politics. There are elements in the NDP that believe higher taxes are a good unto themselves. After all, more government spending is always better, and taxes are simply the way they’re paid for. In this reading, the tax increases are simply a matter of ideology: Rich people (however you define them) should pay more, so they will.
The second possibility is that the NDP doesn’t think the surplus is real, or is maybe just a temporary, unrepresentative blip. There is some justification for this view; even then-finance minister Mike de Jong admitted revenue was higher than expected, in part due to real-estate sales — but this ignores a trend of growing surpluses.
The third possibility — and in my view, most realistic — is that the NDP is saving up for some big spending. To be fair, they have been continuing and, in some cases, even increasing, record investments in transit and housing — even if you don’t include re-announced announcements made by the previous government, and there have been a few. And yes, the B.C. Teachers’ Federation win in the Supreme Court meant substantial additional spending, no matter who sits in government.
But that doesn’t mean the NDP shouldn’t be saving up, because next year is probably going to be expensive. The contracts for nearly every major public-sector union in the province come up for renewal in 2019. This includes nurses, ICBC and B.C. Hydro employees — and yes, the BCTF, which more or less openly expects a substantial pay hike from a party and government they have loudly championed.
All told, the NDP government will have to negotiate agreements with unions representing 200,000 workers.
In other words, they’re gonna make it rain.
Maclean Kay was former premier Christy Clark’s speechwriter for five years.
