Excerpt from the Official Report of


February 18, 2016

Debate: Budget 2016

S. Simpson: I’m pleased to take the opportunity to take my place in budget debate 2016.

When I thought about what I’d want to say — because I’ve been making and hearing these speeches for a lot of years — I was thinking about the economy generally and thinking about budgeting generally and about how we approach that and about some of the realities that we don’t always talk about here. They are the realities of a provincial economy and an economy like British Columbia — a relatively small economy in the big picture of things, an export-dependent economy with a relatively small population.

I was thinking about budgets and how we talk about the economy. The reality is that governments probably don’t deserve too much credit or too much blame for the big economic numbers at the provincial level. The things that drive a provincial economy like ours are interest rates, the value of the dollar and commodity prices. Those are probably the three biggest drivers — and, of course, for us here, what the Americans are doing at any given time and now, to an increasing degree, what China is doing at any given time in terms of purchase of exports and where that is.

The reality is that a provincial government doesn’t have a heck of a lot to say about interest rates and the value of the dollar or what happens with commodity prices in an economy that pays a lot of attention to resources. I think that’s a bit of the reality on the big numbers that we realize in British Columbia, and that’s what the situation is.

Then the question becomes: what is the role of the provincial government in the economy? And it really is about how it responds to those factors, how it responds to those issues, how it responds to those circumstances that it’s presented with. That’s the debate that we need to have here.

When I listen to the Minister of Finance and I listen to ministers on that side, or responders on the government side, talk about the budget here, there is a pretty single-minded focus, largely — not exclusively, but largely — on the balanced budget. I understand that. That is the place where B.C. Liberal MLAs go in this debate. It is about that issue, and I get why that is. It’s because there really is not a whole ton there, over and above that.

Balanced budgets are important things. Any and all governments, I anticipate, would like to balance budgets and work at that and find that that kind of fiscal efficiency is an important thing, as you can achieve that. But the other thing we know about budgets, and certainly about the budget in British Columbia, is that provincial budgets, the budgets of a province, are not like the budget or the fiscal statement of a business or of anybody else, at that point.

The role of government is different. It’s not simply about balancing the bottom line. It’s about a whole lot of other factors. It’s about people, largely, and it’s about being able to manage the situation for people. It’s about being able to engage and encourage the economy of British Columbia in ways that work for all British Columbians.

That becomes, I think, the debate here: whether what the government has done in 2016 and in previous budgets, and in the efforts leading up to this budget…. Has it, in fact, done a good job of doing that? I think there are some pretty serious questions about whether that has occurred. When we talk about and when I hear the Finance Minister talk about the economy of British Columbia, he glosses over — or chooses not to speak about, because I’m sure he knows — the reality of the British Columbia economy.

The reality is that when you look at the numbers in British Columbia, we have two economies in this province. We have an economy in the Lower Mainland and components of the south Island that’s pretty strong, doing pretty well. It has some real challenges, and I’ll talk about those in a second. And then we have the economy of the rest of the province, which is not in near as good shape. It’s an economy where there’s a lot of uncertainty, where people aren’t sure about jobs, where people aren’t sure about economic opportunity or people aren’t sure about where things are going.

The question becomes: does this budget, in fact, speak to those two different realities of the British Columbia economy? I’m not so sure that it does. I’m not so sure it does that at all.

In the Lower Mainland, the issues are that people are working. They’re having serious problems with making ends meet, though, because affordability is a huge issue in our community — a huge issue. Housing is, obviously, the big driver and the driver that everybody is paying attention to at the moment.

Housing affordability is a great issue. I know in my constituency, I have more people who come into my office, young families, moms and dads with young kids who come in and say: “You know, we make $50,000 a year or $40,000 a year. I got a $20-an-hour job. I’m making $40,000 a year, but I can’t find a place that’s appropriate for me and my family and my kids, and if I can find it, I can’t afford it.” That story gets told over and over again.

The Minister of Housing talks about housing. The minister and the government have done a number of things around housing in relation to homelessness and in relation to people who suffer from mental health issues and addictions. There has been work done there.

But as the minister has said — I know, in previous estimates, to me, when I had the critic responsibility for this — other than rent subsidy, he has not seen the responsibility of government, outside of the rent subsidy program, to deal with family affordability issues. That’s a private market initiative and responsibility, and rent subsidy is the way that he and his government will support people who face challenges there.

We have a difference. We believe that there is a greater need to create affordable housing and that that has to be done.

The minister has talked about the $355 million. I’ll be very interested to see how much of that money goes into family affordability and how much of it goes into what have become the more historic and traditional areas where the minister has chosen to invest when he’s had money to invest.

Much of this money has come, of course — and we know in the housing field — from the sale of a significant number of properties, mostly into the non-profit sector with non-profit buyers who are purchasing those. I look forward to understanding those agreements better in the future, about how that’s being paid for, how that money is coming back, to what degree the non-profit sector is paying for the government’s housing initiative announced in this budget and how those organizations will be supported in terms of how they address some of the housing, moving forward, that they’ve now purchased or acquired — lots of it that is going to need support in terms of maintenance and upkeep in coming years. I’ll look forward to seeing how that all occurs.

Affordability becomes that significant issue in the Lower Mainland. In other parts of the province, the issue is: “Am I going to have a job? Is there going to be enough income for my family? Am I going to be able to address that?” We didn’t hear a lot of discussion about those issues in the budget, quite frankly.

We’ve seen the government move from the preoccupation — and I certainly understand this — on LNG, a preoccupation that was initiated by the Premier heading into the last election: $1 trillion of economic activity, $100 billion in a prosperity fund, 100,000 jobs, debt-free British Columbia. Maybe we’d even get rid of the sales tax. Now, of course, we have the Premier saying that we have to do something now around LNG to try to hang onto the 13,000 or so jobs that are in the sector today. That’s where those claims came from.

There’ll be a lot of talk about whether the market shifts and the price of oil are the driving force. Obviously, that’s a significant part of this. But let’s be clear. When the Premier made those commitments, she said she would have a plant up and operating in 2015. That would have meant a whole lot of action from 2013 to 2015, none of which occurred. All of that was in the period that largely would have preceded — much of that activity would have preceded — the oil crash. But it didn’t happen. It didn’t happen.

There were unbelievable commitments and promises made by the Premier around LNG at that time, and the only success they realized is that they fooled British Columbians in the 2013 election. That was the extent of the success of those promises.

Sadly, we have no sense that we’re going to see more success than that. We might. We might see something in the next year. Who knows. But at this point, the reality is what it is.

Now we’ve seen the government move to a discussion of diversification, and that’s a good thing. It’s something that we’ve been saying to this government since those promises started to arise — that we need a diversified economy, and we need the government to be talking to other sectors.

We know that not long after 2013, when the frenzy was going on, on the government side, around LNG — it has cooled considerably now; I understand that — it was extremely difficult for industries and sectors that were not connected to LNG to get the government’s attention on markets, on regulatory regimes, on assistance, particularly coming through and looking at these businesses that were still recovering from the 2008 hit and were still trying to move forward. The government was not paying attention to those interests.

I hope, for the sake of those sectors — because they’re the ones that are creating jobs today, the ones where thousands of people work today — that the government now has changed gears and is paying somewhat more attention to the needs of those sectors of the economy. The needs are real. They’re signing paycheques today for thousands and thousands of people across the province, and they need more help.

When we talk about what the economy has to achieve and what it has to accomplish, we know that one of the big challenges — it certainly is, for me, a big challenge — is to reduce inequality. Reducing inequality is a combination of dealing with issues like poverty…. We know that in this province, we have about half a million people living in poverty. About a third of those are kids — a little bit less but around that. Kids don’t get poor by themselves. Poor kids mean poor families.

Of those poor families, about half, maybe more than half of them, have a full-time paycheque coming into the house. But they’re struggling. And they’re not alone. That’s about minimum wages and close to minimum wages. We went in this province…. The Premier introduced changes back in 2011 or 2012. She took our minimum wage from the bottom, after a decade of no increases under Premier Campbell, and she took it up and made it the second- or third-best minimum wage in the country.

Well, today, after the latest 20-cent increase, we are back down to the second-worst minimum wage in the country. And we will be the worst by the end of September — the worst minimum wage in the country. Some of the highest cost drivers in the country. The worst minimum wage in the country.

And it won’t get any better. We’ve indexed it, but so has every other province in the country indexed their minimum wage. It will just get worse, because we start at the bottom of the heap. Yet this minister, this government, has decided not to address that, even though the Premier committed, at the time that she made those increases in 2011 or 2012, that there would be a review every two years. The Premier talked about that review every two years. That has gone into the trash heap — that review.

The minister responsible for the minimum wage, the Minister of Jobs, was very clear in estimates that the government is satisfied with the 20-cent increase that brings the minimum wage to $10.45 an hour. She’s happy to stay at that level with the modest increases that CPI will provide, moving forward.

People are not able to live. Those people living in poverty — hundreds of thousands of people, the working poor — are struggling with that, and they’re not getting by. No matter what we believe, they are not getting by. So we have that challenge with the minimum wage.

In this budget, there was no discussion. Year in and year out for a decade, we have talked about the need for a poverty reduction strategy. The government has continued to say no to that and talked about the best poverty reduction strategy being a job. But jobs aren’t doing well in this province.

The country is in trouble — absolutely. But we’re in sixth place in private sector job creation. Sixth place in the country in private sector job creation, and we have the worst wage growth in the country. So those people who are working, particularly at lower pay rates, are not finding a way to increase their income. They’re struggling with very low wage growth.

I was talking…. I was at an event put on, I believe, by the Vancouver Board of Trade. The CEO of Vancity, a major financial institution, and Jock Finlayson from the Business Council — both of them talked about the challenges of inequality and the challenges of wage growth as being critical factors to grow our economy in British Columbia in areas that need support.

The budget has done nothing to deal with those issues of inequality and critical wage growth. We just have not seen that in any way, shape or form here. We need to move in those areas, and this government has chosen not to touch those areas.

We’ll know. We can contrast the 20 cents versus the tax cut for the top 2 percent. Ministers will know. We talked about year 1, when it was $236 million in a tax cut for the top 2 percent. Yet of course what we know is that’s every year. So over a four-year period, it’s $1 billion that will go into that tax cut versus 20 cents an hour for people on minimum wage. Somebody who earns $1 million a year will get an $18,000 tax cut out of that versus 20 cents an hour in the minimum wage.

The minister — and I understand why — talked about the $355 million allocated to housing — $1 billion in tax cuts for the top 2 percent over four years and $355 million for housing over five years. That is a choice. That’s a choice the government made — $1 billion for the top 2 percent and $355 million for housing affordability. I don’t think it’s a good choice.

I understand why the minister wants to embrace that. I don’t blame him. But it’s not a good deal. There’s nothing good about this.

As we read in the newspaper post-budget, it is a budget of half-measures, of mediocre measures, wrapped around a government that embraces the balanced bottom line. I understand why they embrace the balanced bottom line, because there’s not a lot else to talk about in this, other than the bottom line. There’s not a lot else about this budget that anybody is going to be terribly proud of.

They talked about children and family supports. Those dollars were put there because of the absolute disaster in that ministry in the last year — suicides and deaths. The children’s representative and Mr. Plecas’s report, on issue after issue, saying: “You have to deal with this, and it’s going to cost money.”

This isn’t about being magnanimous about this. This is about serious damage control. As we know, there is nothing more important than damage control for this government.


S. Simpson: ...We know that the inequality in British Columbia, the breadth of inequality, is probably greater than anywhere else in the country. We know that our poverty levels are extremely high. We know that child poverty is high. We know that the working poor are challenged and that we have a minimum wage that doesn’t meet their needs.

All of these are the kinds of issues that a budget should have begun to tackle, and none of them are tackled in this budget. Not one of those things is being addressed in any way, shape or form in the budget.

What about the tools, though? We hear the government talk about the economic tools and talk about jobs and that. Well, one of the things we know…. We’ve had lots of debate here about Site C at different times in this House. We know one of the things that provincial governments do is capital projects.

Often people talk about how governments don’t create jobs, but we know the reality is that in challenging economic times, capital spending, taxpayer money for infrastructure, is in fact a big job driver and is something that is used pretty effectively.

The reality about capital spending is that it’s been a tool that has been used in this province since the days of W.A.C. Bennett by every provincial government that has existed. I will assure you that just as this government is using capital spending, the next government will use capital spending, as well, as a way to ensure and build and upgrade and improve infrastructure in the province in a whole variety of ways and as an economic incentive and an economic tool.

The difference comes in how you view that capital spending. We’ve seen the government’s view. We see it with the Site C project, where the labour model, the agreement that’s been put in place in terms of Site C, is an agreement that has no guarantees around jobs for British Columbians. It has no guarantees around apprenticeships. It does not have a working relationship with First Nations. It does not say a thing about local procurement and the need for local procurement to be a priority.

When we are spending taxpayers’ dollars, B.C. taxpayer dollars, it seems to me that while absolutely everybody gets to bid the job who wants to bid, it is entirely reasonable for us to say we are using taxpayer dollars to build infrastructure that we require, but we’re also using those taxpayer dollars as an economic tool.

It’s a tool to build economy, to build community, to ensure that we’re meeting objectives around skills training, that we’re in fact supporting small business and local procurement and that we’re supporting local economic development. All of that, if it’s going to occur, doesn’t occur on a hope and a prayer and a wish and a dream. It occurs by putting in place agreements that accomplish that. We have used, in the past, models like project labour agreements that in fact accomplish those objectives.

Here’s the difference in terms of capital spending between what we’re seeing today with this government…. We’ve seen it with Site C. I expect we will see the same model used in other capital spending that has been referenced in the budget. We’ve seen a pretty desperate situation, when it comes to private dollars, with the project development agreement that was put in place around Pacific NorthWest LNG, which abandoned any kind of significant benefits to the province.

That’s a contrast to the discussion we’re having in regard to project labour agreements that ensure that people are working with security and good wages in projects where apprenticeships are a critical part of that; where we’re revitalizing our building trades, which require that; where we’re ensuring local businesses are getting the support that they need and are able to in fact prosper by development going on in their communities.

It’s so that we have a partnership that’s meaningful with First Nations in their territories, where these projects are occurring, so that they are getting a piece of the economic opportunity, they’re getting a piece of the jobs, they’re getting the skill training for their young members of those bands, of those nations, to ensure that they’ve got economic opportunity and a skill set that will ensure good jobs in those communities.

None of that will happen unless we put the deals in place. And what could possibly be better than modelling a project labour agreement — every one will be slightly different; there’s no doubt about it — that can be applied, where everybody knows it’s the same rules for everybody? We invite all to bid on these jobs. That’s never in question. But you bid in a set of rules that ensure a maximum benefit for British Columbia and British Columbians when we’re using taxpayer dollars to pay the cost of those projects.

That’s something that this budget is absolutely silent on. We’re getting nothing out of that, and it begins to raise questions about how much of a waste that is in terms of taxpayer dollars going out without realized material benefit coming back to British Columbians.

There’s small reference to forestry, a critical resource. And as we see, LNG is kind of on the ropes at the moment. We know that commodity prices around mining are in some trouble. We all hope that will rebound, that it’s cyclical and it will rebound, and that copper and other products will begin to see the benefit of that. We know that forestry, the one truly renewable resource we have, is available to us today, but we have abandoned looking at forest health. We need to revitalize those forests. We need to invest in forest health.

Why aren’t we building a partnership with First Nations, territory by territory, to partner in the revitalization and development of a forest health strategy to rebuild our forests as best we can? Why aren’t we partnering around real R and D to look at the products, whether it’s in pellets, in other products? We know from talking to people now, to the industry, that there’s progress being made there, but we know we can take greater advantage of it. Why aren’t we doing a better job there? That’s not in this budget.

Why aren’t we doing a better job there? Why aren’t we saying that when it comes to raw log exports, the reality is that we’re going to ensure that mills that want to create real opportunity for jobs in communities across this province will access fibre at a fair price — they have to pay a fair price — before logs will go offshore? That’s got to be a first step, but the budget is silent about that, absolutely silent. Those are just a couple of examples of what we face.

I come back to the comments I made at the beginning around the budget. A provincial budget is not like a corporate balance sheet. It is about people. It is about balancing resources and revenues and deciding priorities on revenues. Government has a lot of access to revenue but has to choose priorities, has to balance that with spending and, most importantly, has to balance that with people and their needs and has to balance that, particularly, with making sure we meet the needs of our most vulnerable citizens.

We’re not doing that with the working poor. They are struggling. That struggle continues, and there is no sense that life is getting much better for those thousands and thousands of British Columbians who are struggling today. We need to do a better job. It needs to be about people and communities.

We know that while the economy is strong in the Lower Mainland, pretty strong in the south Island, costs of living are prohibitive. We’re not seeing support to ease those pressures on the people who live in those communities who are particularly challenged by that. The budget is silent on that issue.

In the rest of the province where, in fact, the economy is challenged, you have to ask yourself what we’re doing there. You have a handful of capital projects that have been talked about. But where is the rest of the strategy?

This is a budget that, increasingly, you hear on the street: “Yeah, it’s balanced. But what else is there?” People are happy to have a balanced budget, but they know that there are much bigger issues than a balanced budget in terms of the economy of the province, and they want to know where the government is.

Today, the government is nowhere. We’re seeing that struggle. We’re seeing the competing interests. We’re seeing the Premier and the Finance Minister taking absolutely contrary views on MSP in the press. One’s saying: “We’ll change it all next year.” The other one’s saying: “People have to be accountable.” I guess we’ll get this sorted out sometime. There’ll be one message sometime when the two of them get in the same room at the same time and talk to each other. Maybe there’ll be one message. Maybe not. We’ll see how that proceeds.

It is a budget that simply leaves people in this province wanting. It’s a budget that does not connect with the vast majority of British Columbians and their interests and concerns. It’s a budget that just leaves most people flat. They’re not angry about it. They’re not supportive of it, because it just is a budget developed by a government that clearly has run out of gas — probably good in a fossil-fuel time, to run out of gas.

That’s the reality we face. It’s unfortunate, but it is what we’re dealing with. It’s a budget that really is not worthy of this province and of the people in British Columbia, sadly. But I suppose it is probably worthy of the B.C. Liberals.




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