CCPA Policy Note

BC Budget 2013 News Release

February 19th, 2013 · · 3 Comments · Economy, Provincial budget & finance

We will be posting more commentary on the budget in the coming days; this is our news release from today’s budget lockup.

Budget may be “balanced,” but lack of action on poverty, climate creates  serious social, environmental defecits

(Victoria) The 2013 BC budget focuses on balancing the budget at the expense of British Columbians’ present and future wellbeing. That’s the conclusion of CCPA-BC economist Iglika Ivanova.

“The Finance Minister talks about the need for continued discipline, for tough choices to control spending,” says Ivanova. “But years of tax cuts have created unnecessary and avoidable fiscal constraint. We’ve starved key public services and left many of our social and environmental needs unmet. Those are real defecits that we don’t hear about.”

Ivanova praises the government for raising corporate taxes and personal income tax for wealthy British Columbians. However, she characterizes the increases as unnecessarily cautious: only a 1% increase in the corporate tax rate, and small, temporary increases for personal income taxes. “Our research shows that we can do more; the public is ready for tax increases that support an improved quality of life.”

The CCPA’s main concerns include:

  • The BC Early Childhood Tax Benefit, which does not kick in until 2015, is too small an amount to make a real difference for families: the benefit is $55 a month, whereas childcare fees range from $800-$1,400 a month.
  • MSP rates continue to rise and have nearly doubled since 2000. Families will now pay almost $140 per month in MSP, a regressive tax that no other province charges.
  • Even with the increase in corporate taxes, the province will be raising as much revenue from MSP premiums as from corporate taxes.
  • The lack of action on climate change is disturbing, as we see an increase in severe weather events and other consequences of climate change.
  • The continued lack of a comprehensive poverty reduction plan, even as most other provinces have created plans. BC has the highest poverty rate and the second highest child poverty rate in Canada.
  • BC is not getting a fair return on our publicly owned natural resources. Revenue from resource royalties is at a near record low, even as natural gas production is at an all-time high.

“Today’s budget puts short-term fiscal savings ahead of real, long-term investments in our province and our citizens,” says Ivanova

For more information or interviews: Sarah Leavitt, cell 604-253-7210 or sarah@policyalternatives.ca.

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    3 Comments so far ↓

    • Keith Reynolds

      The BC Business Council now has their analysis out. Interesting that they question whether or not the budget is really balanced.
      http://www.bcbc.com/content/731/2013%2002%2021%20BA%20BC%20Budget.pdf

    • Guy in Victoria

      The Liberals keep talking about huge savings from the public sector wage contracts. The government say’s schools, hospitals etc will have to find the savings within existing budgets to cover the 1 & 2 %’s that were gained last year. However I have yet to hear from government or those schools, hospitals etc how those savings will pay the increased wages & benefits. Are we expecting a flood of bad news at the end of year when these services adjust their budgets and realize the only way to do that… is to cut services and or big layoffs ?

      What is your opinion?

      Guy

      • Iglika Ivanova

        Good question, Guy in Victoria.

        In theory, the so called “cooperative gains” mandate is supposed to pay for the small wage increases in the public sector through savings identified by the employer and the union. These shouldn’t be secret, and some of them are likely included in the collective agreements signed. I’m not an expert on this, but my understanding is that usually those “savings” are in fact reductions of other benefits either for current workers or for newly hired workers (which is very problematic because it creates a 2-tier structure in the union).

        For example, under the Nurses’ last contract, new workers hired after Jan 2013 will not be entitled to cash in their unused sick leave upon retirement, while current employees will continue to get a 40% payout. See here http://bit.ly/YT7YY6

        Other “savings” in the nurses’ contract included extending the workweek by 1.5h to reduce overtime (getting an additional 72 hours of work per year for what’s essentially the same pay (assuming 4 weeks vacation).

        The reductions in services for schools and hospitals will likely come not from public sector wage pressures but from the very small budget increases these sectors have been receiving over the last few years, while costs are increasingly shifted to them (and not just negotiated wage costs) — for example, to cover increasing MSP premiums (which were hiked by 4% again for 2014), the requirement to be carbon neutral and buy offsets from the Pacific Carbon Trust, etc, etc.