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Volume Ten, Number Three   May 2005

Big Lies – Pay Big Dividends

Murray Dobbin

There's no lie like a Big Lie. And as happens so often in politics in this country, the big lies -- those repeated over and over again -- pay big dividends. This has seldom been more true than the current election and the fact that the BC Liberal's whole campaign rests on the lie that 1) they inherited a huge deficit from the NDP and 2) that through tax cuts and excellent economic management Gordon Campbell turned things around and saved the province.

Front Page CartoonFirst, the foundation for all of the Liberal's propaganda: the NDP deficit myth. Rather than hand the Liberals a huge deficit requiring severe cuts to public services, the NDP in its last year in office, 2000-2001, racked up the largest surplus in BC history to that date - a total of $1.56 billion. The previous year, the NDP had a surplus of $150 million.

When he won in 2001, Gordon Campbell faced a problem: that pesky surplus would put pressure on him to spend on social programs. Better, in the odd logic of right-wing neo-liberals, to face a fiscal crisis, a deficit crisis. What better way to rationalize the most vicious cuts to social spending and environmental protection the province had ever seen?

How do you create a fiscal crisis? Simple. Take over $2 billion dollars of government revenue and burn it - or, even better, give it away in tax cuts to your friends. BC's largest corporations got a huge whack of tax cuts and so did BC's wealthiest residents.... (continued)

Small Business Group Backs NDP

Marco Procaccini

The supposedly “business friendly” image of the BC Liberals is again being challenged as one prominent small business organization has strongly endorsed the NDP in the May 17 election, claiming the Campbell government has gone out of its way to hurt small business.

The Community Business and Professional Association of Canada has slammed the BC Liberal government for jacking taxes and fees, mis-managing the province’s finances and stifling consumer spending by undermining wages and raising and transferring huge costs onto middle-income earners.

“When the NDP left office in 2001, it left a 1.4 billion dollar surplus. This has been verified by the politically independent Auditor General,” says CBPA President Dave Myles. “Without even a glance at the books, Gordon Campbell gave away 2.2 billion dollars a year in a 25 percent tax break to the richest 5 percent of the BC population, wiping out the entire NDP surplus and driving BC into a record deficit. He then made massive social spending cuts to pay for this tax break.”

Myles says this is more than just unfair. It’s also bad business, he says, since the tax break either directly or indirectly involved taking money out of the pockets of small business, working people and local economies—which are the main markets for small business. Myles quotes Statistics Canada figures showing that small business makes up about 43 per cent of the workforce and opens up a whopping 70 per cent of job in BC. Also, the BC Federation of Labour reports that over 50 per cent of its affiliated union members work in certified bargaining unit in single-outlet companies of fewer than 30 employees. It is also estimated that around 40,000 union members are self-employed owner-operators.... (continued)

What goes up must come down

Budget cuts make BC communities more economically vulnerable

Marc Lee

BC’s economy is a lot like a rollercoaster ride. Commodity prices for our resource exports (like energy, forest and mining products) go up and down over the years, and our economic fortunes lurch along for the ride.

This is especially true in BC’s “heartlands”. While the current economic upswing masks differences, BC actually has two economies: the diversified and populous Greater Vancouver and Victoria areas, and the rest of the province, which continues to be highly vulnerable to the resource rollercoaster’s ups and downs.

High international prices for resources are driving our current good fortunes. But caution is advised: what goes up must come down. And recent changes in BC’s taxation and spending policies may make for a rougher ride when the next downturn hits.

The provincial government’s income tax cuts concentrated dollars in the areas that needed a financial boost the least. The 66% of tax filers in the Lower Mainland and Victoria received 71% of the total tax cut pie. The remaining 29% of tax cut dollars were spread more thinly across the rest of BC. This lopsided distribution happens because incomes in the Lower Mainland and Victoria areas are higher than in the “heartlands.”

Income tax cuts were also closely followed by tax increases for MSP premiums (up 50%), sales taxes (since reversed), fuel and tobacco taxes. These tax increases hit rural BC harder, eating up a greater share — more than half — of the total dollars gained from tax cuts.... (continued)

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