A few months ago, economist and CCPA research associate Jim Stanford gave a talk in Vancouver based on his newest book, Economics for Everyone: A Short Guide to the Economics of Capitalism. Of the many important insights that he discussed, perhaps the most significant concerned a problem that has afflicted British Columbia and most other provinces for years.
On the one hand, British Columbians suffer from unemployment and underemployment. On the other, there is a great deal of work that needs to be done: creating affordable child care, improving public transit, developing green technology, investing in adequate housing and so on.
So there are people who need work, and work that needs to be done. Furthermore, as noted in the CCPA Submission to BC Budget Consultations 2016 by Iglika Ivanova and Marc Lee, “governments can play a role to stimulate the economy and support demand by running deficits and increasing public investment in infrastructure.”
This idea that governments can and should intervene to correct market failures is neither new nor radical— it’s basic Keynesianism; and it’s the approach that the new federal government has proclaimed to be its own. Deficits are justified as necessary to provide the investments needed to improve the economy, create jobs and provide important benefits and services to all citizens.
This sensible and more equitable approach is not, however, the policy of the BC government. First, the government created an artificial budget deficit, primarily by cutting taxes on corporations and wealthy individuals. It began with Gordon Campbell in his first year in office, back in 2001. Contrary to campaign promises, the Liberals gave the largest tax cuts to the wealthiest. For instance, a working person making $20,000 per year saved a paltry $236, while a person making 10 times as much, $200,000, saved $7,797 — more than 30 times as much.
The resulting loss of government revenue and the manufactured deficit were then used as an excuse to both cut services to the public and increase user fees on vital needs such as ferries and health care. After all, a “balanced budget” is most important.
One of the worst examples of government neglect relates to the lack of funding for children in need. When asked about providing adequate services for this vulnerable group, Premier Christy Clark said that funding would be made available only when there were increased taxes from the proposed LNG industry — at some time in the future, maybe, someday.
We have the highest child poverty rate in Canada but no plans to really put “families first.”
This policy continues in spite of the fact that every dollar invested in children, or to feed the hungry, or to end homelessness, actually saves the province more than the costs of this neglect (in social costs, medical care, policing, and so on).
And in the last few days there has been yet another terrible story about a young First Nations woman whose tragic death might have been prevented if she had received adequate support from provincial social services.
Such horror stories are not inevitable. Stanford’s insight demonstrates that the provincial government’s priorities are not based on some rigid economic law but are rather the result of political decisions, decisions that are subject to change. And as he notes: “Workers and poor people get only as much from the economy as they are able to demand, fight for, and win.”
We are a rich province. There is work to be done, and people who need jobs. And there is no economic excuse for poverty, hunger, homelessness and growing inequality. It is, above all, a political decision.
Topics: Provincial budget & finance