“Budgets are really about choices,” said Finance Minister Carole James, more than once, as she delivered her third budget as B.C.’s finance minister.
That being said, there were fewer choices to make in this budget than her first two.
With over three-quarters of the NDP’s election platform already on the way, and a commitment to a balanced budget, there was always going to be little room to manoeuvre — even if reforms at ICBC and a slight slowdown in the provincial economy hadn’t taken place.
But those did things happen, and it meant the government had a decision to make: how would it stay in the black without going back on spending commitments in the expensive health and education ministries?
The answer was a new tax on the people making the most money in the province — giving the province its highest marginal tax rate (20.5 per cent for people making over $220,000) this century.
“If you had taken al look at the past government, what often would happen at this time when you saw moderation in the economy, you’d see programs and services cut … we’re not doing that,” said James.
“In order to do that, we’ve asked the top one per cent to pay a little bit more. We believe they’ve benefited from a strong economy, and we believe they can contribute a little bit more.”
Death by a thousand hikes?
Not surprisingly, the B.C. Liberals feel that the top one per cent have already been asked to “contribute a little bit more” one too many times under this government, whether it be from income taxes, corporate taxes, employer health taxes or the school tax.
“The lack of competitiveness when it comes to the tax regime, when it comes to regulations, is causing serious repetitional damages to British Columbia. People are choosing not to invest here,” said MLA Stephanie Cadieux.
“When tax structures get too uncompetitive, people just leave,” echoed fellow B.C. Liberal MLA Shirley Bond.
It’s a message the Liberals have consistently made while in opposition, but which so far has had limited traction outside its base because the province continues to be among the nationwide leaders in GDP growth.
At the same time, business groups are also becoming more critical of the government’s approach than they were earlier in its term.
“If a couple years ago was death by a thousand cuts, it’s death by 10,000 cuts,” said Val Litwin, CEO of B.C.’s Chamber of Commerce.
“The biggest missing piece today was a strategy around competitiveness … what we’re seeing form small to big businesses is a real paucity around an economic strategy.”
An NDP government will take their lumps from the Chamber of Commerce when it comes to tax policy: distributing wealth to the most marginalized is an article of faith.
At the same time, the budget disappointed a number of groups that have been supportive of the government to date.
“They’ve kicked the can down the road a little bit,” said Jill Atkey, CEO of the B.C. Non-Profit Housing Association, who criticized the lack of new investments in new housing outside of commitments for more shelter and modular units.
“This is a budget that’s not going to improve the situation.”
Several poverty advocate groups asked why there were no new commitments on disability or welfare rates. And Vancouver Mayor Kennedy Stewart, himself a former NDP MP, expressed disappointment about the lack of news on drug policy or a Millennium Line extension to UBC.
“We need bold investments … if we’re to continue to help power B.C.’s economy.”
Of course, the longer you’re in office, the most people you’re likely to disappoint.
But as the clock ticks closer to the next provincial election, James shows full confidence in what has been a consistent governing approach.
“It’s my job to ensure the benefits of B.C.’s strong economy are felt by everybody,” she said, “not just those at the top.”