Where did that $3 billion go?

In April 2008, the British Columbia government issued a press release to inform the public of the success of their tax-cutting program.

In April 2008, the British Columbia government issued a press release to inform the public of the success of their tax-cutting program. It boasts, “In 2009, BC will have the lowest personal income tax burden for individual taxpayers in Canada on income up to about $111,000.”

The release goes on to say that “Effective July 1, 2008, BC’s corporate income tax rate will be 11 per cent, the second lowest tax rate in the country, with further reductions planned to 10 per cent by 2011.”

This joyous news was tempered somewhat this week by the revelation that the province is headed for a $3-billion revenue shortfall. Finance Minister Colin Hansen told reporters, “We are living in a different world today … Things have changed dramatically for the province.”

The changes Hansen refers to have come about since his pre-election budget, in which he predicted a surplus for the fiscal year 2008-09 and a minor deficit of $35 million for 2009-10. Hansen and the rest of the Liberals campaigned on these numbers up to the May 12 election day.

What is it about the world today that’s so different from the world of early May? Hansen gave only two examples of these startling changes: Fighting this year’s forest fires cost the province $400 million, while the social services budget went up by $100 million. Even if the projected budget for fire-fighting had been zero, this would leave a gap of nearly $2 billion between pre- and post-election projections.

In February, TheTyee’s Will McMartin described Hansen’s budget as “misleading and deceptive,” pointing to several places in which revenue expectations were highly unrealistic. Investigative reporter Bill Tieleman described the Liberal figures as “toxic fudge.” In short, it was clear to anyone who took the trouble to do the math that the $35-million figure was a hoax.

Gordon Campbell came to power, in part, on the strength of two running controversies, dubbed “scandals” at the time, concerning a former New Democratic premier, Glen Clark. In one case, Clark was accused of trading major political favours for minor renovations work, and in the other he was accused of cooking budget figures prior to an election. Neither accusation survived in court, but Campbell’s cheering section in the corporate media made sure both accusations were front and centre at election time.

The evidence that Campbell and Hansen fudged the budget is considerably stronger than was the case against Clark, but it gets more modest coverage, perhaps because the media are happy with their corporate tax cuts, down to 10 per cent by 2010, or as the 2008 press release says, “one of the most competitive business tax regimes in Canada.”

It’s not clear exactly how competition between provinces for lower tax rates is expected to benefit Canadians, nor is there any indication where the race to the bottom might end. If Newfoundland goes for nine per cent, will BC down the ante, and take eight?

When Campbell and other Conservatives run on the promise of balanced budgets, voters need to read between the lines to understand that the books will only be balanced if it can be done at the expense of the poor and powerless. The rich and powerful, when affected at all by government policy, must win. That is an inviolable rule.

Enter the harmonized sales tax. According to a July press release from the office of the BC premier, the planned new HST will reduce the tax burden on business by $1.9 billion. Fortunately, they’re not tossing that money away, though, they’re just shifting it to individual taxpayers.

Campbell’s government is scandal-ridden, incompetent, and untrustworthy. Its support for fish farming has in all probability destroyed the Fraser River salmon fishery. The party has been saddled since almost its first days in office with a massive influence-peddling scandal over the sale of BC Rail, and their toadying to corporations has made life harder for ordinary British Columbians by the year.

If Liberal failures, skullduggery and number-fudging got the kind of media coverage that was lavished on Glen Clark’s deck, they would never have seen a second term in office. But even a pliant press can only cloud the picture for so long. The sad news is that this government is only a few months into yet another term.

Just think of the harm they’ll be able to do in another four years.

Al Pope won the 2002 Ma Murray Award for Best Columnist in BC/Yukon. His novel, Bad Latitudes, is available in bookstores.

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