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.