Saturday, February 28, 2015

Political football - winners and losers

Senior governments download responsibility for delivering services but seldom include taxing authorities to match spending demands. The download trend is demonstrated in a report by The Columbia Institute:


British Columbia's government prefers to raise revenues from individuals through consumption taxes and user fees rather than by progressive income taxes, natural resource proceeds and levies on corporations. That serves the interests of Liberal Party shareholders but it has the potential of creating disquiet among voters, the people asked to fund government operations.

Downloading serves political purposes by shifting both responsibility and accountability. The current transportation funding debate illustrates the issue. Having spent or committed almost $10 billion on Highway 1 improvements, the Sea To Sky Highway, South Fraser Perimeter Road and the Massey Tunnel replacement, the province is not anxious to take a lead on transit improvements in the lower mainland. One reason is that an effective transit system serves a different constituency. Visions of ordinary workers toting lunchbags onto a bus do not excite Liberals like contributions from wealthy exploiters of natural resources.

So, the Clark government tossed the transit ball to municipal politicians. Those ambitious folks took the bait, created a wishlist costed by spin doctors and invited citizens to vote for imposition of a new sales tax. It is a levy that does not begin to fund the projects but voters are told, "Don't worry, accept the tax and worry about the rest of the money later."

That's a prescription for a local disaster. What happens if the provincial and federal governments contribute less than the billions needed? What if they contribute nothing? That half-point regional sales tax will suddenly grow and the wish list will contract.

Metro Vancouver mayors, with Burnaby's sage Derek Corrigan a notable exception, played into the hands of Liberal strategists. Although the business of TransLink is critical to millions of people - more than half BC's population - Christy Clark's government left the stage. They don't want to spend money from other sources, for the reasons noted above, but they will accept a sales tax increase, as long they don't have to wear it directly.

This is a template they will use elsewhere in the province. If Southern Vancouver Island wants transit or infrastructure improvements, invoke a regional sales tax. If the Gulf Island and Sunshine Coast want improved roads or ferries, how about a regional sales tax? I'm not aware of another local sales tax in Canada but it has been discussed at the Federation of Canadian Municipalities. In the USA, many local areas impose a sales tax, with rates typically between 2% and 4% added to state sales taxes. If you think the lower mainland transit tax will remain at 0.5%, then I've got a multimillion dollar bridge to sell you.

The key to understanding the actions of the BC Liberal government is to understand the interest groups they aim to serve.


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9 comments:

  1. Thanks for this bit of logical explanation. I am offended at the groups lining up to promote a yes vote as if it will suddenly alter behaviour of the spendthrift transit organization or the provincial government. I would like to see a careful value for money audit at Translink although I don't think they'd dare to do it voluntarily. Despite reports from the provincial Comptroller General pointing out huge problems, the main issues are not addressed. No wonder that Bob Mackin hits a brick wall when he tries to get information. If they had nothing to hide, they would not be hiding anything.

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  2. Norm
    That's a concrete question
    Competitors for bc rail complained of bid rigging .hmmm.

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  3. “I am offended at the groups lining up to promote a yes vote as if it will suddenly alter behaviour of the spendthrift transit organization or the provincial government. “

    You are in good company; if spending 10 million of our tax dollars on a non-binding circus of a referendum isn’t blatant enough waste check this one out;

    Translink received a new large passenger ferry for its Vancouver - North Vancouver service last year (2014), "Burrard Otter 2". It carries 395 passengers and is 112' 6" long x 41' 6" beam and depth of 11' 8". The motors provide 1,600 HP. It was built in SINGAPORE for $22 million.

    Last year (2014) Halifax Transit received its new CANADIAN-BUILT passenger ferry "Christopher Stannix". She is about 1/3 smaller: 79' x 31'. Her cost was $4 million. But even if I double the cost I get to $8 million (and Halifax just issued a contract for 2 ferries for $8 million).

    What is so special about our "Burrard Otter 2" that we had to pay some 5 times the cost?

    Fine, one third larger? ok I will be generous and let’s say 10 million.

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  4. The more I see this plebiscite evolving, is that the Liberal regional mayors are playing along with Christie Clark with this electoral charade and the NDP (except notably Derek Corrigan) have been duped by the province and the City of Vancouver. More and more I see the provincial Greens, NDP and Horgan nothing more than puppets of Moonbeam, Meggs, and the SkyTrain lobby.

    Gywn Morgan and Dobell have done their work and an SNC/Bombardier lead Broadway SkyTrain subway is certain and little for South of the Fraser, as media favourite, the teenager Daryl Cruz will see to that.

    Huge tax increases, regional road pricing and the balkanization of Metro Vancouver into wealthy and poor ghettos is near at hand.

    It will be a generation more before the public sees the sheer dishonesty of TransLink, the BC Liberals, the plebiscite and the mainstream media, which covets adverting dollars from the YES side.

    Bid rigging? Hell the bids were rigged for this in 1999 with the formation of TransLink. Don't just blame the Liberals, the NDP had their dirty hands in this mess as well. The public is screwed!

    ReplyDelete
    Replies
    1. How could we afford a subway under Broadway?
      There is already $70 billion BC total debt, plus $102 billion in future contractual obligations.
      Not including $9 billion for proposed Site C.
      Something wrong with this picture.

      Delete
    2. Hugh states the disconnect. Political leaders promise to spend billions and to pay off billions already spent but, in reality, less is coming in than is going out. We're digging a deeper hole because a bunch of people make money selling us shovels.

      Delete
    3. BC can't pay off what it owes right now, let alone $billions more for new infrastructure.
      We're like Greece, we're bust.
      This is why the govt is so desperate for LNG export to work out.

      Delete
  5. Norm, this blog should be required reading by every taxpayer in this province. Its an excellent primer, on the manipulation of the public and their tax dollars, by the kleptocratic regime known as the BC liberal party. Politics in this province is an extravagant shell game, maintained and overseen by a select group of con artists, bent on increasing their own wealth and power.

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  6. All I can say is I love my mayor (Corrigan)! And I'm voting NO! I was also under the impression that West Van's mayor is on the "no" side?

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