Yes: Government needs to apply tough medicine to an ailing economic system
What does Bank of Canada governor Mark Carney know that the Fraser Institute and a wide swath of B.C. business lobby groups refuse to recognize in North America?s Occupy Movement? After all, it was Carney who, when asked to comment on the rise of the occupy movement, said in an interview with CBC?s Peter Mansbridge that the demonstrations organized in major centres across the continent were ?entirely constructive.?
It?s a view that reflects concern among many policy-makers that growing disparities in the distribution of wealth and income not only provoke social unrest, they also undermine the capacity of governments to finance basic social services. But even more fundamental is that growing income and wealth disparities are also a drag on the broader economy.
Each one of those points deserves far more than the word count of these columns, but even a brief recount of the last 10 years in this province provides a compelling reminder of why we need to close those disparities sooner rather than later. In the name of fiscal stimulus, it was Gordon Campbell?s tax-cut policies, launched in 2001, that have left B.C. in the fiscal sinkhole that we find ourselves today. Corporations and B.C.?s wealthiest individuals got billions in tax relief, all premised on the myth that rewarding the rich and powerful would somehow benefit the rest of us.
A decade later and close to $8 billion in forgone revenue to the provincial treasury, B.C. now has seen its public debt levels almost double, while child poverty rates have made B.C. the worst-performing province in Canada on that point. Between those two numbers are littered closed schools, longer health-care wait lists, more families in poverty, an over-crowded judicial system that increasingly has become the purview of those who can afford pricy lawyers, and a province where more and more public assets are placed on the auction block for privatization.
Hardly the stuff that makes you want to describe this province as ?the best place on earth.? Maybe that?s true for a precious few, but more and more British Columbians are having a hard time seeing themselves in that overused phrase.
What the Occupy Movement has done is shine an uncomfortable light on those disparities. Why, for example, is it sensible or fair to have 67% of Canada?s wealth controlled by less than 3% of Canada?s families? Or why should the average British Columbian have to pay 12% tax on a hamburger, but when money managers trade billions of dollars on the stock market that same sales tax is nowhere to be found. Occupiers quite rightly ask where the fairness is in that. They suggest a reasonable measure would be a ?Robin Hood Tax? on those financial transactions, a tax that might begin to close that aforementioned wealth and income disparity.
A Robin Hood Tax might also begin to replenish government treasuries so that we can reverse some of the massive declines in public services that are damaging our economic prospects. With the extra revenue that a fairer tax system could generate, we could fulfil the aspirations of so many young students who want to learn and acquire relevant skills, but are afraid to do so because the prospect of student debt is just too much of a barrier.
It was the BC Business Council?s Jock Finlayson who remarked recently that the cuts to government services had gone too far, so far, in fact, that basic permitting processes for accessing public lands faced lengthy delays that made the prospect of investment that much more daunting.
The business council is hardly a left-wing entity, but even it realizes that the endless rounds of budget cutting within various ministries and the demise of program and staffing levels within government have a negative consequence for the broader economy.
What?s missing in the business council?s analysis, however, is the courage to recognize that tax revenues have to increase, and those who have benefited the most over the last decade should logically be the ones paying the lion?s share of that increase.
Tough medicine? No, just a sensible response to a problem that took a decade to create and, at current rates, will take a decade to fix. Unfortunately, most British Columbians aren?t prepared to wait that long for real change. ?
