Will the “Jobs Plan” just add to the government trust deficit?

September 24th, 2011 · Keith Reynolds · No Comments · Economy, Provincial budget & finance, Transparency & accountability

http://www.policynote.ca/

There has been some very good analysis written about the details of this week’s roll out of the BC Liberal government’s “Jobs Plan.” A number of pieces are on this site. Marc Lee and Iglika Ivanova had an excellent column in the Sun. Instead of commenting on the policy thrust, however, I would like to talk about some of the process issues – process in the plan itself and the process that was used to roll the plan out.

The most illustrative part for me was the announcement that there was going to be a review of BC’s tax system.  The CCPA has called for a Fair Tax Commission but the review promised by Christy Clark promises to be anything but fair.  Instead, as the government backgrounder states:

The panel of business leaders and expertswill be asked to:

  • Develop recommendations to help support a globally competitive, diverse economy that supports jobs and innovation with the Province’s balanced budget framework.
  • Develop recommendations to simplify and streamline the sales tax system to make common-sense improvements to reduce administration for government and business
  • Develop recommendations for closing tax loopholes

The point here is that, once again, our tax policy will be made by “business leaders and experts” – the same people who gave us the HST.

So that is who the government will be listening to. Who did they present their plan to? Not the legislature. Not the people we elect to represent us. On Wednesday the Premier’s speech was to the Surrey Board of Trade.  Thursday the Vancouver Board of Trade got to see the plan. Friday it was a speech to the BC Business Council.  Some people have called this the Liberal Party’s annual report to donors.

Now business plays a vital role in British Columbia. Their voice needs to be heard. But for ten years it is the only voice that has been heard. The result has been cuts in taxes for business and the wealthy, increases in fees we all pay and cuts in services for those who need them most. And for the government the result last month was a humiliating defeat of their centerpiece tax policy.

If the government had been just a little less deaf to the concerns of ordinary people we might have seen a tax change that worked for all of us.  Ontario implemented an HST after a year of consultations. As a result of those consultations the Ontario HST looked different than ours and there was much less hostility than we saw in BC.

Eric Reguly had a very good column in the Globe and Mail last month when he addressed this question in the context of Italy’s decision to kill a minimal wealth tax.  He concluded:

The point is that austerity programs will fail if they hurt, or are merely thought to hurt, the poor and middle classes more than the rich. If the average taxpayer knows that the rich are feeling no pain while he or she is, rebellions are almost certain and history shows that they can end badly for the privileged. Afflicting the rich and the unrich together is the way to go. It would also help build trust in governments at a time when they, like Italy’s, suffer a severe trust deficit.

There is no doubt in BC when it comes to government there is a trust deficit. The process by which the Jobs Plan was rolled out and a continuation of having “business leaders and experts” make tax law will make it worse.

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