Excerpt from the Official Report of
DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)


February 19, 2015

Remarks on the 2015 BC Budget

S. Simpson: I’m pleased to have the opportunity to join the debate on the budget and to get a chance to talk about where this government wants to take us over the next period of time.

When we talk about budgets produced by governments, they’re more than simply sets of numbers. They’re more than a bottom line. They really are about the vision of government. They’re about government strategy. They’re about how government intends to engage that vision and that strategy and, in a programmatic way, what that starts to look like. They are about how governments decide to create strategies that will create jobs and opportunity for people — in this case, in British Columbia — and they are about how governments embrace fairness. Especially, that becomes true in tough times and in times when people are very pressured around money — times like today.

That’s what we have to look at when we look at a budget. I know that the government and the member previously, who I always appreciate listening to, and other members have been pretty single-minded in terms of trying to embrace this because of a bottom-line number and saying that it’s a successful budget because of a bottom-line number.

That’s not the way that you measure budgets in terms of how the people in this province live their lives every day and in terms of the struggles and challenges they have and in terms of the responsibility and obligation of government to help to ease that a little bit where they can; to create some opportunity where they can; to, in fact, be a partner with the people of the province when they can; to help people achieve better outcomes for themselves, for their children, for their family and their loved ones.

The question becomes: has this budget taken us down the road to accomplish that? Well, I think you look first at some of those values. You look at how some of those things are reflected in the budget. I think one of the items, and the one that probably jumps out first and foremost — it’s the one that’s become a topic across this province, and rightly so — is the decision of the government to effect, essentially, a tax cut for the top 2 percent earners in this province, to effect a tax cut for those people who earn more than $150,000 a year.

What that tax cut means…. That’s $236 million, that tax cut. As an example, for somebody who has a million dollars a year, that means $17,000 more in their pocket. The contrast to that is that the government put in place fees in excess of $700 million that people will face in this province. That’s $700 million in the next year. We’ll talk a little bit more about that as we move forward.

What that tax cut for the top 2 percent says, more than anything else, is: what are the values of the government? What is the vision of the government? How does the government view what’s good for British Columbia? I think it just speaks legions when you look at that — a tax cut for the top 2 percent earners. It just simply is not justified in any way, shape or form, particularly at this time, and it’s a cut that we know nobody has been talking about. It’s a cut that none of those earners were talking about.

Let’s talk about what the effects are and why that’s so problematic and why so many people in this province are angry at the government for making the decision to support those who can afford to pay a little bit more, could afford what they were paying. They’re not being asked to pay more. They’re just being asked to continue to pay what they were paying.

What’s the problem here? Well, let’s look at some of these. We have a challenge with inequality in this province. We know the challenge is real. We know it’s a problem. We know from Stats Canada numbers that British Columbia has the highest level of inequality in this country among provinces: the difference, the spread, between the wealthiest 2 percent — probably the high end of the 2 percent — and the folks at the bottom end, the folks who will get a break because of the clawback. Those folks versus the folks at the other end — we know that we have the highest levels of inequality in the province when it comes to that. We also know that we have the lowest wage growth, or some of the lowest wage growth, in the province as well — again, Stats Canada numbers.

We have this situation. To put this in some kind of context, when you talk about poverty…. We’ve often
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in this place talked about poverty reduction. Now that Saskatchewan has adopted a poverty reduction plan, British Columbia is the only province in Canada that has not seen poverty reduction as a priority that deserves specific and direct attention, the only province in the country that has not embraced a plan that said: “We are going to put targets and timelines on this. We are going to focus some effort and initiative to drive poverty down, and we are going to look at the causes of poverty and see what we can do to drive those down.”

It’s a real problem in this province. We have about half a million people in British Columbia who live in poverty, based on Stats Canada numbers. Roughly a third of those are kids. We have continued to have the worst numbers, or bordering on the worst numbers, of poverty in this country for over a decade.

It’s challenging to get at that. It’s not easy to resolve, and it’s not cheap to resolve. But at least every other province in this country saw fit to focus on making the effort. British Columbia is the only province that has not seen fit to focus on an effort to try to address that issue — an effort that may have been successful, may not, but at least there would’ve been effort. There has been no effort here in British Columbia and no effort from this government.

What the government has said about poverty when it’s been raised here is…. It’s talked about strong economies. It’s talked about jobs. So let’s talk about jobs.

We have a jobs plan in British Columbia, a jobs plan that was adopted by this government in 2011. Now, what we’ve seen from the jobs plan is anemic performance at best. We currently have the lowest employment rate west of the Maritimes in the country. We’re doing better than folks in the Maritimes — I’ll give you that — but everybody else in the country not so much in terms of employment growth.

We’ve seen our numbers that put us at about seventh place in growth — certainly, since the plan was adopted in 2011, sitting at about seventh place overall. We’ve seen a situation where we have had minimal growth, particularly in terms of high-income jobs. That’s been a part of the problem. Most of the job creation we’ve also seen has been low-income jobs and low-income growth. That may, in some ways, be some of the biggest challenge that we face, in fact: how we grow our jobs and the value of those jobs.

When you look at Stats Canada numbers and you adjust for inflation based on Stats Canada numbers, it shows that B.C. wages between 2006 and 2012 actually fell in terms of their buying power by 2.4 percent, putting us in last place in real wage growth.

This becomes a problem. It’s a problem not just for us, but it’s a problem that’s being recognized by business leaders across this province.

Business leaders are talking about this challenge. On January 22 in the Vancouver Sun, in response to an article about these issues of low wage growth, the following comment was made. “Income data released over several years ‘suggests our economy isn’t creating enough high-paying jobs, that there are relatively more low-paying jobs over time within the broader labour market and that policy-makers need to pay more attention to the problem of significant numbers of employed people whose job-related earnings make it hard to support a household.’”

That was a comment by Jock Finlayson from the B.C. Business Council. That was Jock Finlayson saying that policy-makers in this province need to pay more attention to job growth and wage growth in this province and that we’re not getting it done.

I had the opportunity to attend a Vancouver Board of Trade event looking at the state of the economy. One of the key speakers at that event was Tamara Vrooman, a well-known, well-respected business leader, president and CEO of Vancity Savings, past Deputy Minister of Finance here with this government. When she was asked what the most important issue facing British Columbia is today, she said low wage growth. For her it was low wage growth and the impacts of low wage growth and what that does on spending and on business stimulus.

We know that in this province — again, you can go back to Mr. Finlayson’s work, because he’s spoken about this on numerous occasions — the key drivers in this economy tend to be residential construction and consumer spending, and low wage growth becomes a significant problem on the consumer spending side. If people don’t have money in their pockets, they don’t spend the money.

That comes back to the challenges of over $700 million of additional fees/taxes, call it what you may, this year in this budget. So we have this situation where we have the challenge around jobs, around wage growth, around anemic job growth in the province, and, as I said before, we have a significant challenge around fees.

http://www.leg.bc.ca/hansard/40th4th/20150219pm-Hansard-v19n11.htm

I spoke a minute ago about the situation with the tax cut for the top 2 percent — a $236 million tax cut — and we have to contrast that with those additional fees. Revenue anticipated from tax hikes — call it fees; call it taxes; call it what you will — Hydro, $286 million in ‘15-16; MSP, $93 million; ICBC, $206 million; ferries, $61 million; tuition, $62 million; adjustments to the homeowner grant threshold, $6 million. That’s $714 million of new fees and costs, with very, very little relief in this budget. Very little relief in this budget.

How did we get here, what is the response, and how does the government deal with this? Well, we know the response up until budget day, up until this budget, to pretty much any question related to the anemic state of the economy. To be clear — I’ll echo the comments of my colleague from Surrey-Whalley here a little bit — it’s
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been a challenging time in the economy everywhere, and we all know that. But the response has been LNG. There has been no response other than LNG when it has come to this province’s and this government’s response and, primarily, the Premier’s response. It has certainly been echoed by her colleagues in the executive council.

You know, the Premier told us…. She called LNG her government’s central preoccupation, and her laser focus promised one LNG terminal would be on line by 2015 and three would be on line by 2020. Those numbers have bounced around a lot, but that was the claim.

[1435] Jump to this time in the webcast

The result of the claims that the Premier made about LNG, she was pretty specific about. The Premier wasn’t vague. She was pretty specific about the value for British Columbians of LNG.

She promised a windfall from LNG that would wipe out British Columbia’s debt, would reduce or eliminate the sales tax, would fund enhanced government programs, generate $1 trillion of economic activity, fill a $100 billion prosperity fund and create as many as 100,000 jobs.

Apparently it’s not a windfall anymore. It’s aspirational now. That’s the difference. It’s now become aspirational and not a windfall. It’s a chance that we’ll get this. It wasn’t a chance when the Premier started talking about this. It wasn’t a chance when the government set everything else aside to focus on this, the central preoccupation of this government, as the Premier has said — the central preoccupation.

Well, we all know that none of that has been accomplished. None of that has been accomplished. There’s an argument today that the price of oil has exacerbated the challenge of accomplishing that, and I think there’s some truth to that. I certainly believe there’s some truth to that, but let’s be clear. We have some idea of the amount of actual work that needs to be done to get to that point where we could open the door for LNG. The Premier talked about a plant in 2015; we have to remember that. Yet none of the steps that had to be taken were taken until last fall — around taxes, around environment, around any of those issues.

If the government was that slow off the mark to accomplish those things, how on earth would it even have been possible to be talking about a 2015 plant? That’s because we mostly saw rhetoric. The government’s rhetoric is very good, and the Premier’s rhetoric is excellent, but that’s mostly what we saw.

Unfortunately, we’ve created a situation now where people are frustrated because of the promises that were never kept — the promises that were so definitive, so matter-of-fact from this Premier, and not kept. That’s a problem. That’s the situation that we face today.

How do we respond to this in this budget? Well, one of the things government has done — and governments of all stripes do this, and it is not a bad thing — is invest in capital spending, another $4½ billion. That will take us up to record levels of over $70 billion of debt, primarily on capital spending.

It’s not a bad thing on its own, by any means. You need to determine those projects — which projects make sense, and which projects don’t make sense — set the priorities for those projects, and move ahead.

Now here is the challenge, though, that we’ve seen with this government on these projects. The government has had a habit of having dramatic cost overruns. It has been the government’s habit on major capital projects.

On project after project we have seen major capital and cost overruns, cost overruns that add to those billions of dollars, hopefully some of it being well spent on things that we need, whether it’s new schools, new health care facilities, roads, infrastructure — all important. But what do we know when we look back?

Just to look at five of the major projects that this government has produced over the last number of years…. The northwest transmission line — $342 million over budget. That’s 85 percent. The South Fraser Perimeter Road — $464 million over budget, 58 percent. The Port Mann/Highway 1 — $1.8 billion over budget, 120 percent. The Vancouver Convention Centre — $341 million over budget, 68 percent. The B.C. Place roof — $149 million, or 41 percent. For five projects, $3.1 billion over budget.

Think about what we could have done with that money if the government had simply managed those projects properly. Think about what we could have done with that money — over $3 billion.

[1440] Jump to this time in the webcast

That’s part of the problem we have here in relation to how we deal with that. What do we need to do here? Well, we would start with the need to really talk about economic development in ways that are jobs-driven and about high, good-paying jobs.

Economic development that’s about good-paying jobs. That was part of the challenge, as we know, with the LNG initiatives as it became clearer and clearer that memorandums of agreement were being signed with nations of origin or with some of the major companies that made it clear that significant numbers, if not a majority, of temporary foreign workers would be accepted as part of the mix.

We all know temporary foreign workers add little value for British Columbia. Now, workers who come to this country with a path to citizenship and the opportunity to set down roots here and make Canada and British Columbia their home — they add real value. But that’s not what we’re talking about in this instance.

We need to have a B.C.-first plan here. We’ve heard the rhetoric about B.C. first. That rhetoric has to be realized in terms of actual programs. I don’t think we’ve seen that.

We need to have real investment in education. Real investment in education doesn’t
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mean cutting the budget for post-secondary. Real investment in education doesn’t mean nickel-and-diming school boards once again. It means putting money in and seeing education truly as an investment and not as an expense. We need to do more of that.

And there needs to be a clear strategy about how we strengthen the middle class in this province, how we strengthen middle-class and working people. We know — all of the literature will tell you — that if you want to reduce inequality, one of the cornerstones of reducing inequality is strengthening the middle class. That’s the key to the success of reducing inequality.

We’re not doing that in British Columbia right now, and it’s a problem. We need to reinforce that and find ways to do that. This budget didn’t take us there.

It comes back, I guess, to the comment that I made at the beginning. I understand the government is pleased with the bottom line of this budget, and I get that. Everybody likes to have budgets that stay in the black.

But government budgets are about much, much more than that. They are about a plan. They are about a strategy. They are about a vision. They are about fairness and balance. They are about embracing the people that we represent and making sure they have opportunities — that we’re giving them the tools to ensure their kids have opportunities, that we’re taking care of seniors, that we’re taking care of those people who face the biggest challenges and are the most vulnerable in our society. All of that is part of where a budget has to go.

When you balance the budget, you want to balance the numbers but you have to balance those other values and other needs as well. If you can’t accomplish that, then your budget is not a success and your budget hasn’t worked and your budget has not taken us where we need to go. This budget has not accomplished those things. It hasn’t accomplished them in any way, shape or form.

I know how much this frustrates the other side, but it probably is the biggest symbol of this, of where those misplaced priorities are: top 2 percent earners, $236 million of tax cuts. Everybody else, $700 million of additional fees. That’s what we have. How that makes sense, how that’s fair, how that’s balanced and how that helps this province move forward are questions that have not been answered by that side in any way.

What I expect we will see bear itself out over the next couple of years is that this budget has come up terribly short in terms of meeting the needs and aspirations of the vast majority of people in this province — meeting the needs and aspirations of our kids, our seniors, the people who are looking forward to some hope. If you can’t create hope, you have to ask yourself what you’re doing. If you can’t create opportunity, you have to ask yourself what you’re doing.

To the Premier, it has to be more than empty rhetoric. It has to be substantive. We have now seen, based on the evidence, years and years where this simply has not been substantive. This is another example where it’s not substantive.

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