Next Tuesday, the BC government presents its first full budget and it’s an opportunity to tackle significant crises of affordability, inequality, poverty and environmental degradation.
To do so in a meaningful way, the government must think big and be bold.
After 16 years of underfunding key programs and services, BC needs new public investments to create a universal high-quality child care system, build tens of thousands of affordable homes, undertake ambitious action on climate change, strengthen education and health care and reduce poverty. To help make this happen, taxes must be increased for those who are amassing a greater and greater share of our province’s wealth.
We cannot afford to stick with the status quo yet we’re accustomed to being told – and too often believing – that this type of change is not realistic or affordable.
BC’s shameful levels of poverty come at a huge price: our research shows between $8.1 billion and $9.2 billion is lost annually in economic output and other costs. Lack of affordable child care shrinks our economy by keeping thousands of young parents — mostly women — out of the workforce. And BC wastes hundreds of millions of dollars annually on unnecessarily high drug costs instead of implementing universal pharmacare that would bring large cost savings.
This is just the tip of the iceberg.
Lack of investment in affordable housing not only hits families in the pocketbook every month, it affects quality of life and hurts the ability of businesses to recruit workers.
The good news is that BC has the economic and fiscal capacity to put our best values into action.
Consider how BC’s public spending compares to our total economic pie – a measure of our collective capacity to pay for things. It’s a little known fact that provincial public spending as a percentage of GDP has declined substantially since the late 1990s.
BC’s economy generates $276 billion annually. If we dedicated the same share of our economy to public spending this fiscal year as we did in 2000, we could make additional investments of more than $6 billion per year.
There are many options for raising revenue collectively. For example, BC just cut MSP premiums in half – a welcome move. But that lost revenue — more than $1.2 billion a year — should be fully replaced with fairer personal and business taxes. Our modelling shows how this can be done while leaving the vast majority of BC households with more money in their pockets.
We can also harness the huge increases in land values in BC – hundreds of billions of dollars over the past decade alone – through a progressive property surtax on the wealthiest landowners. And, more broadly, the time has come for a Fair Tax Commission to review the entire provincial tax system – including natural resource royalties – in discussion and consultation with British Columbians.
The resources are available for BC to have the bold, transformative change we need. The question is whether British Columbians — us and the government — are prepared to think big.
Alex Hemingway is CCPA-BC’s Public Finance Policy Analyst. His work focuses on the state of BC’s public services, including education, health care, social services, housing and regulation. He also investigates the taxation system and its relationship to inequality and the capacity of government to provide high-quality and accessible public services.