October 15, 2001
North Okanagan Labour Council President David Doran made a presentation to the Legislature's Finance and Government Services Committee on its pre-budget tour of British Columbia. Here's part of his submission:
VERNON - The provincial government has been moving at an extremely fast pace to complete their list of commitments spelled out in their New Era Agenda.
In a short period of time, from June to August this year, we have seen in excess of 40,000 jobs lost in British Columbia. Recent announcements underscore the government's intent to have its ministries cut a further 40 per cent from their budgets, which will put as many as 8,000-10,000 people out of work.
The provincial deficit for the year ending March 31, 2002 is now expected to hit $1.98 billion. Although the Liberals haven't quite said that it is the fault of September 11, Finance Minister Gary Collins noted at a recent press conference that there is too much uncertainty these days for their previous budget projections to hold.
I will remind the panel that during the election campaign we were told that tax cuts would lead to a booming economy, no matter what. The no matter what has happened and the only sign many British Columbians see is the black hole into which their lives have fallen.
As noted previously, Collins and Premier Gordon Campbell insisted that the economic stimuli resulting from tax cuts will, without exception, mean more money for the government immediately. This has not happened. The debt is close to $2 billion and rising.
Even economists have said that while there would be some return from cutting income taxes, it could take up to 10 years for all of it to come back and even that isn't guaranteed. The Institute of Chartered Accountants of B.C. warned that there "is little or any empirical support" for the claim that tax cuts are free.
The favourite example of how tax cuts work has been Ontario, where annual revenue from personal income taxes has grown by $3.3 billion since 1996, while the income tax rate was cut by 20 percentage points, according to A New Era.
When experts noted that there were other causes for revenue growth - notably a booming U.S. export market for Ontario goods, the premier dismissed these explanations and said that external factors were irrelevant.
That must mean that September 11 and the lumber tariffs are irrelevant! He also said there won't be a shortfall.
The growing deficit is mostly the result of these same Liberal tax cuts. The shortfall adds new urgency to the push to slash the public service.