When the provincial election was held last year, does anyone recall Christy Clark’s Liberals talking about a sales-tax hike? Because in Greater Vancouver, that might be about to happen.
To help with transit costs, some mayors in the region want half a point added to the tax. And provincial transport minister Todd Stone is amenable. He has approved a binding plebiscite on the issue.
Stone won’t permit the words “sales tax” to appear on the ballot: He prefers “Metro Vancouver Congestion Improvement Tax.”
But a sales tax it nevertheless is, since it will apply to the purchase of virtually all goods and services in the region (a few high-ticket items such as cars might be exempted). If voters agree, the new measure will raise $250 million a year, and cost the average family $125 annually.
Just about everything imaginable is wrong with this idea. Yes, it will raise money for projects that are definitely beneficial.
But there are other ways of doing that. And the rest is all downhill.
First, there is the matter of precedent. The authority to levy sales taxes has always been a closely guarded privilege of senior levels of government, and with good reason.
Municipalities already possess robust revenue sources, such as property taxes, fuel surcharges and so on. If they are now allowed to get into the sales-tax business, a vast new field of taxation is opened up.
Where will that end? Can municipalities in Greater Victoria plead for a sales-tax hike to pay for the new sewage treatment plant?
And why stop at municipalities? The Fraser health authority in the Lower Mainland has seemingly endless money problems. Are they next in line? Or school boards perhaps?
The government might say none of these are intended. But this is how bad policy gets promulgated — one small step at a time.
Then again, by refusing to blend this new levy with the existing tax system, the minister is inviting a bookkeeping nightmare. Every cash register in the region might have to be reconfigured to show two tax lines instead of one.
A cynic might detect sleight of hand here. This looks suspiciously like a scheme to avoid political accountability. The minister can blame the mayors, the mayors can blame the public (“they voted for it”) and everyone is off the hook.
Next there is the plebiscite itself. A draft ballot has been posted online. It lists a cornucopia of attractions, such as increased bus services, greater safety for cyclists, better roads, an earthquake-proof bridge, and so on.
Then voters are asked if they agree to a half-percentage-point increase in the sales tax. No other choices are offered.
Why is that? Municipalities in the Greater Vancouver region have combined budgets of around $3 billion per year. Can’t some of these transit projects be funded through internal economies? But voters don’t get to choose that option.
Finally, there is the powerful role that special interests often play in plebiscites. The public-sector union CUPE has already spoken in favour. The Vancouver Board of Trade, perhaps seeing business opportunities for its members, is also on board.
Where does that leave the ordinary taxpayer? Outgunned and out-organized.
That might not matter if the measure involved were temporary in nature. But is it likely that such a levy, once granted, will ever be rescinded?
More important, the power of taxation is arguably the most weighty and far-reaching government prerogative. It should not be dangled at the end of a string in this manner.
The mayors in Greater Vancouver might have a case for more spending. But so does every municipality in B.C.
This is a very long road to go down, and like every journey, it starts with a single step.
