Be afraid, British Columbians. Be very afraid.
The big business lobby was the guiding hand behind Gordon Campbell’s introduction of HST. The aim: to relieve giant multinationals from paying tax in this province. They were already able to avoid income taxes by arranging for profits to be earned by offshore affiliates but were troubled by paying provincial sales tax (PST). When the BC Liberals switched to HST, all sales taxes were then refunded to businesses, a change that over time will profit them tens of billions of dollars.
Since government is collecting extra revenue under HST, and business pays not a penny, it is the pockets of ordinary consumers that are being picked. By the way, has anyone noticed reduced retail prices that were promised?
Now, comes the next financial demand from the large corporations. What is it? Relief from paying municipal taxes.
“[BC Chamber of Commerce] members have made Reform of Local Government a priority area, and are focusing on the municipal taxation system in an effort to stop the subsidization of residential taxpayers through unfair business levies.”
The Fraser Institute is also lobbying for change, complaining,
“British Columbia has allowed municipalities complete discretion in setting property taxes on different classes of property. Since then, BC’s municipalities have enjoyed more property tax discretion than municipalities in any other province and nearly all US states. This flexibility gives BC municipalities the freedom to set any rates they wish on 9 different classes of property, 4 of which are business . . with only minimal constraints on utility taxation.
“. . . the very high property tax rates and ratios imposed on major industry, and to a slightly lesser extent utilities, in a significant minority of BC’s municipalities have caused the province to have a serious business climate problem. . . “
The Canadian Federation of Independent Business also calls for businesses to be given relief from municipal tax. Incidentally, the CFIB, an organization noted for selfish rhetoric, claims to speak for small business. However, its “Governors” are, almost without exception, millionaire executives and its CEO’s previous employment was with the federal government and the TD Bank. Small businesses, are they? This is what CFIB says about BC property tax,
“Small businesses continue to face excessively high tax bills compared to residents for the same value property. . . businesses are unreasonably burdened with paying almost 3 times the property taxes of residents, on average. . . The total tax bill is composed of many other levies that also place a disproportionate burden on small businesses. The province must show leadership and make the necessary changes . . . “
Postmedia, CKNW and other partisan or naive commentators have been applauding the BC Liberal aim of creating a Municipal Auditor General. This is part of a strategy of distraction being developed to shift political attention from the BC Liberal government — the level with the real authority — to local councils, which, by no coincidence, are often influenced by NDP politicians.
The fact is that municipalities are already audited by independent experts. I know because long ago I often worked on municipal audits when I was employed with a firm of Chartered Accountants. In a bit of checking today, I noted that KPMG is the independent auditor for Vancouver City, Victoria and North Vancouver, among others. Audit reports are typically published on municipal websites.
The argument that a municipal Auditor General could ensure that best practices are being shared among municipalities is codswallop. Firms like KMPG already do that as part of the review of management practices. Although, the independent auditor’s job is to cast an opinion of the municipal financial statements, the auditor goes through a very detailed examination of operations and offers many points of advice directly. The audit staff is highly experienced and knowledgeable of municipal operations and management.
Additionally, top municipal staff regularly attend conferences, such as those at the UBCM, where exchange of information and identification of best practices is the raison d’etre. A municipal Auditor-General could add nothing but bureaucratic duplication of services already provided.
In the next election, BC Liberals will pretend that economic problems in the province result from anti-business local governments, administrations so incompetent that a municipal Auditor-General became necessary.
If Christy Clark wants to eliminate local inefficiency, she could start by reorganizing municipal boundaries. For example, Langley City (population 25,858) and Langley District (population 104,697) need separate administrations?
The north shore of Vancouver, where I live, has three adjoining municipalities: North Van District is the largest with 88,370 residents, North Van City has 50,725 and West Van has 44,058. This total of 183,153 spread along the northern side of Burrard Inlet supports three separate municipal governments – three mayors, three councils and three sets of administrative managers earning between $150,000 and $265,000. That inefficiency exists because the local authorities are protecting their own fiefdoms and the province lacks the nerve to impose change.