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Analysis

Budget’s Inequality Measures a Start — But More Progress Depends on Us

Child benefit, Employment Standards reforms offer hope for a more equal BC.

By Paul Willcocks 20 Feb 2019 | TheTyee.ca

Paul Willcocks is a journalist and former publisher of newspapers, and now an editor with The Tyee.

Governments don’t talk about inequality much these days. The B.C. government’s Throne Speech didn’t even include the word.

And while the provincial budget took useful steps to address growing inequality, it also showed how decades of anti-tax rhetoric have limited governments’ options — at least if they hope to get re-elected.

Take the B.C. Child Opportunity Benefit, the new initiative most clearly targeted at inequality.

It’s an important step. The benefit — up to $1,600 for a family’s first child, $1,000 for a second and $800 per additional child — will make a huge difference for poor families, and society, when it’s launched in October 2020. The single greatest determinant of life outcomes is childhood poverty. A small amount of extra income can mean sufficient food, needed medicine, a trip to the library or better childcare, and a lifetime of savings for society.

And the government’s approach is more sensible than the 2015 BC Liberal program that it replaces. That provided less money — a maximum of $660 a year — and only for children under six, while the new program extends support to 17.

More importantly, the Liberals’ program wasn’t aimed at the children and families who needed it most. A single parent working full-time at minimum wage got the same benefit as a family with an income of more than $100,000.

Which is simply stupid based on any pragmatic cost-benefit analysis of the program.

The budget offers a more sensible, effective and progressive approach. The new program provides the greatest benefits to families with a net income under $25,000. The payments are reduced as income increases, but still continue until families have a net income of $114,500.

But if the goal is to change children’s lives and give them the chance to make the most of their talents, then we should spend the money on the families where we can make the greatest difference. It is not that a family with a $90,000 household income in the Lower Mainland or Victoria doesn’t face challenges — they do. But governments should be focused on results, and investing in the poorest children delivers the greatest returns.

Still, as Otto Van Bismarck said, “politics is the art of the possible.” Meaning in this case that ensuring more families receive some benefits will help win the needed support for the NDP.

On one level, it’s pragmatic. Any government wants to be re-elected. And they recognize that opponents and their third party allies are ready to seize opportunities to launch attack ads and social media blitzes. By extending the child benefits to more families, the government deprives the opposition of a point of attack.

Which appears to have worked, as BC Liberal leader Andrew Wilkinson found little to criticize in the budget.

I’d like to think politicians are underestimating our good judgment as citizens and overestimating the influence of special interest anti-tax, anti-government campaigns. But I fear that’s optimistic in a time when the politics of fear seem to be so effective.

The government also continued — slowly — to raise income and disability assistance rates, adding a $50 increase to the $100 bump in 2017. Families on assistance will also be helped by the B.C. Child Opportunity Benefit, as the government has pledged that it won’t be clawed back.

But that still leaves almost 200,000 adults — and 39,000 children — living in government-mandated poverty. Even with the $50 increase, a single-parent with one child on income assistance will receive about $250 a week for food, rent and all the costs of surviving. It’s impossible.

And the budget includes welcome and overdue increases for foster parents and family members who are supporting at-risk children.

One of the most significant steps toward greater equality has received relatively little attention. The budget includes $14 million for the Employment Standards Branch over the next three years “to update employment standards to reflect the changing nature of work and ensure standards are applied fairly and consistently.”

Governments have done almost nothing over the past several decades as workers’ rights, incomes and security have been eroded. Jobs have become increasingly precarious, with contract work and part-time jobs replacing full-time work. Benefits, pensions, security, the opportunity to unionize have all been eroded as regulations failed to keep up with the changing work world.

If the government can deliver on its commitment, life could be made better for hundreds of thousands of B.C. families and reduce poverty and inequality.

All in, the budget makes progress on some key issues, while still avoiding deficit spending — reasonable given the strong economy.

And, the government noted, it did that without any new tax measures to increase government revenues.

That’s prudent, in the current political climate. But the notion that tax increases are inherently bad, created by decades of campaigning by right-wing groups, is a barrier to intelligent policy aimed at building a stronger province and reducing inequality.

In B.C. for example, a single person with $80,000 in income pays the lowest provincial taxes in Canada. A two-income family of four pays more than in four other provinces. Why not discuss ways of ending that disparity, including increases for high-income families?

In 2000, taxes paid by businesses — resource royalties and corporate taxes — provided 23 per cent of total provincial revenues. Since then, their share of taxes has been halved to 11.5 per cent in the current budget. Surely we should be able at least to discuss whether shifting the costs of providing services from businesses to individuals and families has proved to be sound policy, with benefits for all, or a force driving inequality.

We have miles to go before we create a more equal, inclusive and prosperous province. The budget makes some useful steps. But it’s also up to all of us to move beyond the framing created by groups that serve entrenched special interests and accept the importance of a real discussion of issues like tax policy and inequality.  [Tyee]

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