March 3, 2010
MLA COMMENDS SMART POLICY AND JOB CREATION IN BUDGET 2010

VICTORIA- Chilliwack MLA John Les made the following response to Budget 2010 in the Legislature yesterday, highlighting tax relief and smart investments made by the BC Liberal Government. 

“It's a delight to be able to rise in this House this afternoon to comment on the budget that was presented yesterday by our Minister of Finance, and let me say at the outset that I am very proud of the work that has been done by our Finance Minister. In arguably the most difficult financial challenges that we have faced in the history of our province, he has remained calm. He has remained steady. He has kept the financial future of this province intact, and I am proud to say that I'm associated with this particular Minister of Finance and the great work that he is doing.

“It's a fact that the current economic circumstances in the last year or two have been very difficult, not only here in the province — nationally and internationally as well. We have gone through a major international economic downturn, and we have not been immune from that.

“If you look at the economic carnage that that recession has caused and is still causing in Europe today, if you look at the very tenuous financial situation in the United States where more and more they're talking, perhaps, about a double-dip recession, then I think a dispassionate observer would conclude that Canada is faring rather well. Certainly, in the Canadian context, B.C. is doing very well.

“That's not to say that we haven't had our challenges, and that's not to say that we aren't continuing to face challenges, but I think we're meeting them very, very successfully. We are on target to return to a balanced budget by 2013 and no later. That is a particular preoccupation.

“We are, on this side of the House, very mindful of the fact that every dollar of deficit that we run up today is a mortgage on the future of our children and our grandchildren. So I think we have a moral responsibility to ensure that we return to balanced budgeting as quickly as possible so that we will not unduly burden the future of our children.

“I've been listening carefully this afternoon to some of the comments made by members opposite, and I guess I would have to sum it up by saying that I am puzzled when I seem to be hearing arguments that oppose the tax relief that our government has put in place over the last nine years.

“That tax relief has been very, very significant. But I heard the opposition critic for Finance this afternoon decrying the fact that we reduced the machinery and equipment tax and that we eliminated the corporate capital tax. He says this was all done without studies, it was done recklessly, and there are no results to show for it all.

“Well, I am perhaps reminded of the early 1990s when we had no corporate capital tax in British Columbia and the Premier of the day, Mike Harcourt, went to Asia on an economic development trip, purportedly, and reassured folks over there that a corporate capital tax was something he would never do. He promptly came back to British Columbia and imposed a corporate capital tax, and international investment in our province promptly dried up, giving rise to the economic difficulties that we encountered throughout the 1990s.

“So, Mr. Speaker, the tax relief that we have put in place. It would appear to me that this is something that the members opposite are opposed to. This is something they disagree with, and frankly, I'm sorry to hear that.

“I think we have a fundamental distinction between the philosophy on this side of the House, which would have as many dollars retained in the wallets of people who earned that money for them to dispose of as they see fit…. On the other side of the House, it seems that a high tax regime is the one that they favour — for government to spend that money. For me, I guess that describes a pretty clear delineation between the philosophies on either side of the House.

“So as I look at the budget that was presented yesterday, it's pretty clear. Economic commentators across the country are now recognizing that the province of British Columbia is, in fact, going to lead our country out of the economic recession, and I'm particularly pleased to see that.

“I've argued for a long time that the economy of our country increasingly is going to be led by the west, that the increasingly stronger economic association we have with the province of Alberta and more recently with the province of Saskatchewan — and the economic might that unleashes on behalf of this region of the country — is going to make western Canada a significant player in the national and the international context. In that context, British Columbia has a very key role to play as the gateway to the Asia-Pacific.

“I was listening to the member for Stikine just a few minutes ago, and I heard no acknowledgment from the member opposite that we're putting in place the northwest transmission line right up in his riding, on Highway 37, and the job potential that that's going to open up in his riding. I'm assuming that he will be very appreciative of the mining and other jobs that that will potentially create, but just once I would like to hear an acknowledgment of that kind of thing.

“The member for North Coast. I think it was in the fall that he made a two-minute statement acknowledging the great importance of the massive upgrades that have been made to the Prince Rupert port and the container volumes that are now flowing through that port. Again, those are investments made by this government in partnerships with the federal government and others, but again, one of those strategic investments that are going to really unleash economic growth and potential in the north.

“The investments that have been made in Prince George — and I'm thinking now, for the purposes of this discussion, about the investments in the airport at Prince George, where more and more international transport aircraft are going to be able to make use of that airport. It's going to be a major intermodal transportation hub. These are very, very significant investments, and for members opposite to just ignore all that and fob it off as being insignificant, I think, is unfortunate. 

“I was almost encouraged for a brief moment yesterday when the Finance Minister, in reading his speech, was describing investments in education that were being made in Revelstoke, and the member for Columbia River–Revelstoke actually was moved to applause. I just wanted to acknowledge that, because it was one of those refreshing bipartisan moments in this House where he acknowledged that the investments that were being made in his riding were indeed bang on, spot on, and were good for kids and others in his community.

“I mean, if we had more of those moments of honesty in the House, I suspect we would see more of that. I get the fact that members opposite have to oppose. They have to criticize. That is, after all, their role. But you know, a little bit of bipartisanship once in a while is not altogether a bad thing. 

“When we look at this budget…. As I indicated earlier, it's been a very difficult job for the Minister of Finance to stay the course, but he's indeed done that very, very successfully. He has not raised taxes. He's kept in place all of the tax relief measures that have been put in place over the last nine years, some 120 tax relief measures in that period of time. We have a solid plan in place to get the budget out of deficit by 2013. In the meantime, significant new investments are being made in health care, in education and in other social services. 

“Let's talk about education just for a moment. The provincial government, through this budget, is picking up the cost of the additional teachers' salary costs in the next three years. We're also picking up the cost of all-day kindergarten. The annual facilities grant is going to be resumed. 

“Those are major new investments in education, and the per-pupil funding now for all the students in British Columbia has risen to a record high of $8,300 per student. Now, if you look at that in a slightly different context, in a class of 20 that allocation per student actually means that a class of 20 has an allocation of $166,000. 

“It's just another way of looking at it, but I think it's useful sometimes to take a variety of different angles on these things to understand what it really means. When you have a class of 20, which I would suggest is not a big class, and you apply that per-student allocation, there's $166,000 there to educate those children. 

“So I think there is significant new funding there for education. Probably, members opposite will say there could or should have been more. Possibly so, but in these very stringent economic circumstances, this is a responsible measure, and I completely support it. 

“Health care is another area where, obviously, we continue to be challenged, and not only in British Columbia. Right across Canada, in the United States and in many western economies the provision of health care is a significant challenge. We are putting in place an additional $2 billion of funding over the next three years. That is a significant increase, over 6 per cent per year, well ahead of any population increases plus inflationary increases.  But that is the reality of health care provision today. 

“In spite of that, restructuring and being very careful with those dollars is still necessary. We have made huge new investments in health care over the last number of years, in communities like Prince George and Kelowna and Victoria, just to mention a few; in Surrey; and closer to my area in the Fraser Valley, in the Abbotsford Regional Hospital and Cancer Centre. I was just there the other day. That's where my daughter went to have her baby, my granddaughter. A beautiful facility and one that is very much appreciated by the residents of the Fraser Valley. 

“In terms of seniors care, we actually have over 6,000 more spaces for seniors care across the province today. Many of the new facilities that have been built today are first-class. They are a joy to visit, and I know that they are much nicer facilities to reside in for the seniors who stay in those facilities.

“So again, we're making very significant progress there. Is there more that needs to be done? Yes, there is. There always will be. We will continue to make a priority of health care because we obviously owe that to people who require health care services, and we certainly owe that to our seniors, as well, so that they can be looked after decently and in comfort when they arrive in their senior years.

“I touched on tax reductions, and specifically I talked briefly about corporate capital tax, and machinery and equipment tax reductions. But there have been very significant personal income tax reductions, as well, over the last several years in British Columbia. It has resulted in the fact that for people earning up to $118,000, they pay fewer taxes in British Columbia than in any other province in Canada, bar none.

“So just a couple of specific examples. If you have an elderly couple who together earn $40,000 a year, in 2001 — when we had the privilege of becoming government — those people paid $902 a year in provincial income tax. Today they pay zero.

“An individual in 2001 earning only $20,000 a year paid $792 of provincial income tax. Today that individual pays $91.

“An individual earning $50,000 in 2001 paid $3,660 of provincial income tax. Today that individual pays $2,200 in provincial income tax — a 39 per cent reduction.

“A family of four earning $70,000 in 2001 paid $4,552 of provincial income tax in 2001, and today that family of four pays $2,452 of provincial income tax, which is a 46 per cent reduction.

“To put it a different way, if you compare British Columbia to other provinces — and for this example I'm going to use the example of someone earning $118,000 — that person in British Columbia would pay provincial income taxes of $9,804. But in the province of Quebec, that same individual would pay $17,608 of provincial income tax. That is a huge differential.

“I want members opposite to keep that in mind when from time to time they're prone to discussing some of the other ways in which provinces like Quebec and Ontario put their incentives in place. Please do not forget this major incentive, which is also part of the mix. When British Columbia, as compared to some other provinces, has a $7,000- or $8,000-per-year income tax advantage, I think that's something that we should not lose sight of.

“I've already talked about education and the very significant new funding that's in place there, going from $6,375 per student in 2001 to over $8,300 per student in this particular budget.

“I should mention, as well, that there are some other areas where there are funding increases: $22 million more funding, over three years, for full-day kindergarten, which is in addition to the additional funding for that program that was already established previously; additional child care programs of $26 million; $30 million for court services; and another $39 million for policing. Again, what that points out is that even in tough economic times we recognize that some of these areas need some additional funding, and they've got it.

“Similarly, there's $60 million altogether over the next three years for additional funding for sport and the arts. There are more details to come on that, but again, it's a recognition that these are important areas, particularly so coming out of the Olympics. I think it has shown us all the potential that now exists in this province. We've had the most phenomenal marketing opportunity that could ever be imagined.

“It's interesting to note that if the Leader of the Opposition had had her way, that opportunity would never have come to British Columbia. She was very clear in saying she was opposed to the Olympics, but I think even the opposition leader has had to agree more recently that we have had a fine performance by British Columbians in hosting the world in this magnificent marketing opportunity that others in the world can only dream about.

“In compiling this budget, there's also recognition that where expenditures can be cut, we are cutting them. There are a number of ministries that have looked for savings that they could put in place. They have done that, and over a period of three years, those six or seven ministries are able to find $320 million in savings. That is a significant part of the funding that can go to other priorities such as health care, education and other social services.

“We also need to recognize that our economy in British Columbia over the last number of years has become much more diversified than it ever has been previously. I think it's particularly important to recognize how much less dependent we have become on the American economy.

“When you look at the province of Ontario, its annual share of international goods exported to the United States is something like 82 per cent. In Alberta it's 86 per cent. In British Columbia it's only 54.8 per cent, and that is a very good thing. We are more diverse in terms of our markets, which helps to cushion us in times of economic downturn such as we've recently gone through.

“When you look at the rapidly expanding economies of India and China in particular, we are well positioned to take advantage of the growth of those economies, and I think it's another reason for British Columbians to be particularly optimistic about the prospects for our economy here in British Columbia.

“I want to spend just a few minutes talking about the HST. I know that members opposite bring this up often, and they apparently are opposed to the HST, when all of the evidence available internationally and otherwise clearly points to the fact that the HST — or, as they refer to it in other countries, a value-added tax — is indeed a much more efficient way of putting a tax regime in place than a provincial sales tax as we have had it heretofore in our province.

“You know, it's not just this government saying that this is the most enlightened way to proceed. I have a number of comments here. I heard the opposition critic talking about the impact on agriculture. Well, Garnet Etsell, who is the chair of the B.C. Agriculture Council, said this about the HST: "This will have a significant and positive impact on agriculture overall. It's pretty important to my riding. I'm not sure if it's of much interest to the member for Columbia River–Revelstoke, but in my riding when a measure like this is good for agriculture, it's good for the people in my riding.

“Helmut Pastrick, who's the chief economist with the B.C. Credit Union Central, says: "A value-added tax is indeed the most efficient form of taxation." Michael Smart, who is a professor of economics at the University of Toronto, said: "Of course it's a gutsy move. It's a bold move by the British Columbia government, but I think it's one that's going to be good for the province and for the country as a whole."

“Those are just a couple of examples of commentators who have suggested that the implementation of the HST is actually good for the economy, and when you build a stronger economy, it's actually good for all British Columbians.

“I know that members opposite have tended to portray this as a terrible thing. They are uninterested in arguments that suggest that its effect for average British Columbians is going to be very, very minimal.

“I was particularly interested…. I think it was about two months ago now. I came across this document, and it's a document from the Canadian Centre for Policy Alternatives.

“This is not normally a think tank that I would quote, because they are the darling of the NDP. As a matter of fact, in 2001 when the NDP was in the process of leaving office, they made a big grant to the Canadian Centre for Policy Alternatives. So clearly, the members of the NDP usually like what the Canadian Centre for Policy Alternatives has to say.

“The Canadian Centre for Policy Alternatives did a study of the proposed implementation of HST in Ontario. I'd have to say it's a fairly thorough study. They entitled the thing Not a Tax Grab After All. I was…. You know, this is coming from the Canadian Centre for Policy Alternatives. Not a tax grab after all. Imagine.

“Just a couple of excerpts from their report. Now, there are going to be some slight differences around the edges in terms of how the HST applies in Ontario and how it's going to apply in British Columbia, but the principles are the same. These are the conclusions that they came to for the province of Ontario. Families in a wide range of incomes, from $30,000 to $90,000 per annum, "should be better off on average by less than $80 or worse off by less than $65 per year — which, given our assumptions and the limitations of the data, amounts to a wash."

“Another finding was: "The negative impact of the HST increases as income rises. Rich people spend more money than do the poor, and as a result, rich Ontarians will pay more sales tax." I would think that that would have been attractive to members opposite.

“One final observation they had was: "Poor families, those with incomes below the low-income cutoff…come out ahead by around $200, while non-poor families will lose only about $60 per year on average."

“I would commend this report to the members opposite if they haven't already read it. I'd be surprised, actually, if they weren't aware of it but kind of disappointed that they haven't taken account of some thoughts and comments from an organization from which they usually draw a considerable amount of their input.

“We're clearly on course in British Columbia to lead Canada out of this economic recession that we have been through.

“I am confident that we will continue to generate record numbers of new jobs in British Columbia because of the policies that have been put in place, the strong economic ties between our province and Alberta and Saskatchewan, and the implementation of the HST, which will foster very strong new investment in our province. Hundreds of thousands of new jobs will be created as a result.

“As we go into the future, we will have a very strong economy with the ability to continue to fund those important services to people, such as health care, education and other social services.

“I know that my colleagues on this side would like me to continue, but the rules of the House forbid my doing that.”

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