In politics, like in life, you make choices.
Sometimes these choices have agency. Sometimes they are out of need. Sometimes they are for survival.
The BC Liberals, in making their choices Tuesday with their pre-election budget, appear comfortable in their competitive skin as they proceed to May 9. They had some radical options on the table that would have widespread political appeal—profound tax reductions, a splurge on public education, among them—and instead identified some smaller cohorts to target with a more subtle touch.
The largest gesture, one they knew in their hearts was overdue, is the gradual elimination of the Medical Services Plan premium, a unique-to-Canada hidden tax most everyone despises, even in the context of relatively low taxes overall in the province.
Even then, though, the MSP gesture comes with a catch: we’ll take half off next January, if you re-elect us, then the balance will come “influenced by the province’s fiscal capacity.” That will require an improvement in the province’s fiscal projections.
“If we can do better, we can do more,” Finance Minister Mike de Jong says.
So, hardly a full guarantee.
The BC Liberals find themselves steering the country’s best-performing economy, but hardly in a complacent place. The budget documents reflect a cautious tone, as if inclement weather is on the horizon, and thus the typical pre-election goodies are slightly tame and tepid.
The Liberals cite “policy uncertainty” in North America (read: Donald Trump), a “fragile” European economy (read: Brexit and varying degrees of national fiscal problems) and “a period of transition” for China (read: Donald Trump again).
Two anticipated revenue bonanzas are either in decline or in absentia: property transfer taxes are in quick decline (23.9 per cent) and liquefied natural gas revenue isn’t even on the books.
With the question marks on the world economy looming large, the Liberals are not throwing any desperation passes as they enter the throes of the election campaign. Their spending will increase and the tax relief will be relatively modest—about one-fifth of the spending growth.
What they did and what they didn’t do were revealing.
Some of what they did:
1. They took a bit of the heat off small businesses, reducing their income tax rates to 2 per cent from 2.5 per cent. It’s not exactly life-changing, but helpful.
2. Come October (presuming a favourable election outcome, therefore) the tax rate on electricity for businesses will be cut in half to 3.5 per cent. Come April 2019, the tax is gone.
3. They previewed an $87-million commitment to the tech sector in advance of the annual BC Tech summit late next month, with details (and photo opportunities) to come.
Some of what they chose not to do:
1. The Liberals’ forecasts suggests foreign buyers will acquire $1 billion in residential property in Metro Vancouver in each of the next three years, one-third of what is being acquired in the last six months of this fiscal year. There were no further measures to modify the market.
2. The NDP will make child care and education major planks in its election platform, but it was steady-as-it-goes for the Liberals, with a $20-million commitment for 2,000 new spaces—hardly radical or effective given the need.
3. The meagre measures last year for people with disabilities were clawed back in part with additional fees. The Liberals last week signalled they’ll relent on those fees, but Tuesday’s budget does nothing to advance the economic prospects of these British Columbians—something de Jong noted as a “conundrum” of making budget choices. Nor is it helpful to those on welfare. The Liberals want to help them get a job, but not to stay on benefits.
It is true, as de Jong put it to journalists in the lockup, that other ministers across Canada would love to be tabling his budget. That being said, it indicates the Liberals believe they can campaign on their economic record without a stunt.
History will record this gamble as either a reflection of their savvy experience and foresight or a squandered opportunity as they whistled past the graveyard.
Kirk LaPointe is the vice-president, audience and business development, of Business in Vancouver Media Group.
