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Tax Wealthy, Don't Cut Services: Poll

Labour-sponsored survey shows clashing visions over budgeting in tough economy.

By Andrew MacLeod 1 Sep 2009 | TheTyee.ca

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria. Reach him here.

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BCFED President Jim Sinclair: Poll sends a message.

Asked about the tradition of finance ministers using their footwear to send a message about their budget, Colin Hansen said when he presents British Columbia's tomorrow he'll be wearing, "The oldest shoes I own."

The choice has more to do with infirmity than thrift. "I have a toe that's been acting up and these are my most comfortable shoes," he explained.

Accidental though it may be, the metaphor is apt. In February Hansen delivered a budget that promised to keep the deficit to $495 million while protecting health and education. He and premier Gordon Campbell maintained through the May election that their plan was sound.

They have since admitted, as at least some observers suspected as early as February, that the economy is in worse shape than they said and the province's deficit will be much larger. The challenge of maintaining the programs and services British Columbians value has become that much tougher.

Hansen has said the government's revenues are off by about $2 billion and expenses are up by $1 billion. That would spell a $3.5 billion deficit, a figure likely to be mitigated by a one-time inflow of $1.6 billion from the federal government as part of the deal to harmonize the provincial sales tax with the GST at 12 percent.

"The world economy has got far worse than anybody had predicted," said Hansen. Many forecasters believe the economy is gaining strength now, he said, though he acknowledged not all agree. "I've said all along that British Columbia's going to come through this economic downturn better than just about any other jurisdiction in North America. I stand by that today."

Protect services: poll

The government has been looking for places to cut since February, he said. "I'm pretty sure most of those announcements are already out. I don't expect there's going to be any surprises [tomorrow]."

He added, "I think this is going to be one of B.C.'s best budgets because it's actually recognizing that we're coming through an economic downturn. It's going to lay the foundation for economic recovery and it's going to make sure we protect vital health care, education and social services at a very difficult time."

Just seven percent of British Columbians strongly approved of how Campbell's government has so far dealt with the economic downturn, according to a B.C. Federation of Labour poll, conducted by Ipsos Reid in the second week of August and released last week.

Another 31 percent said they "somewhat approved" of the government's performance, while 57 percent disapproved.

A large majority, 68 percent, said protecting services should be the government's top priority. Just 26 percent said balancing the budget, admittedly not likely now, should be.

Tax the wealthy, corporations: most polled

"They didn't buy that we should cut services," said Jim Sinclair, the president of the BCFED. "They just reject that overwhelmingly."

Instead, he said, respondents said the government should increase funding for the health authorities (84 percent), provide housing and re-training for people who are unemployed (81 percent), support post-secondary and employment programs (87 percent). Some 76 percent approved of starting a new childcare program and 84 percent wanted new initiatives undertaken to "protect and create jobs" in the province.

Asked if they agree with increasing taxes on corporations and the wealthy, 76 percent supported the idea.

The poll included 801 adult British Columbians and has a margin of error of plus or minus 3.5 percent, 19 times out of 20.

"It's very clear British Columbians want Gordon Campbell to say I hear your pain, I feel your pain, and I'm not going to use the economic crisis as an excuse to cut services," said Sinclair. When asked whether Campbell will listen, he said. "Does he listen to anybody?"

Independent view needed: Ralston

The Liberal government will have to choose between running a much larger deficit and cutting services, said the B.C. New Democratic Party's finance critic, Bruce Ralston. "The government will have to make some choices and we'll see tomorrow what choices they make."

His guess is more cuts are coming, he said. "It seems to me the government is more focused on the number rather than on the consequences of the cuts."

In recent weeks the public has already learned of cuts to grants for arts groups, the slashing of money school boards use for routine maintenance and an order to health authorities to scale back by $360 million, he said.

"It's a question of broken public trust," he said. "It's very clear that just as the budget deficit number was false, their commitment to protect health care, education and other vital services... are all experiencing the consequences of that deceit."

Taking an idea from Conservative Prime Minister Stephen Harper, Ralston released a private member's bill, the Independent Budget Officer Act, 2009, that would create a position for a watchdog to provide independent analysis on the government's budget.

"The idea is to create a position that's outside the political direction of the minister of finance and the executive branch generally," he said. "I'm not impugning the work of ministry of finance officials, but what I'm saying is ultimately they are subject to the political direction of the minister of finance."

Unrealistic budgets create all kinds of problems, said Ralston. "We are going to see tomorrow the consequences of that misleading of the public," he said. "Budget lies have real consequences and we're starting to see those in the reaction of groups as they discover what the government wouldn't tell them before the election and what is being told them now."

The cuts will cause lasting damage, he said. "Sometimes the kind of incompetent and sudden moves that are being taken by this government are very damaging in the short run and ultimately in the long run to a lot of groups and to the delivery of a lot of public services."  [Tyee]

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