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How BC's Government Failed the Working Poor

Tax changes left behind the 721,000 paid less than $16 an hour.

David Schreck 24 Jul 2006TheTyee.ca
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Policies swept aside low earners.

Does the Campbell government care that many British Columbians are being left behind?

The National Council of Welfare released its "Poverty Profile, 2002 and 2003" on July 20. It found that British Columbia had the highest poverty rate for all persons in 2003 at 20.1 per cent. British Columbians didn't have to wait for the National Council of Welfare's report, since the B.C. Progress Board reported the same thing in its December 15, 2005 Annual Benchmarking Report.

By coincidence Mike de Jong, government house leader and minister of labour and citizens' services, appeared on Voice of B.C., hosted by Vaughn Palmer on the evening of July 20. In a question that I had taped for the show at least two weeks prior to de Jong's live appearance, I asked him what his government was doing to help British Columbians who are not sharing B.C.'s prosperity. After questioning whether I know what I'm talking about, de Jong said that his government's tax cuts help low-income British Columbians, and that I should know that.

In June 2001, before receiving the economic report it commissioned, the Campbell government announced $1.4 billion in personal income tax cuts. No one should forget that those tax cuts provided the same collective benefits to just under 11,380 people who make over $250,000 per year as it provided to almost 1.8 million British Columbians who make less than $30,000 per year. Less than two thirds of one per cent of B.C. taxpayers got 14 per cent of the benefits.

Little solace

On the eve of the 2005 election, the new minister of finance, Carole Taylor, announced a further income tax cut, which eliminated provincial income tax for most individuals earning up to $16,000 per year. That is the tax cut referred to by de Jong, not the 2001 cut, which favoured high-income earners. (After the election, and not disclosed during the election, Taylor announced corporate tax cuts worth $143 million per year, a corporate benefit costing 50 per cent more than the low income tax cuts.) To put it in perspective, a single person earning $16,000 in 2004 would have paid just under $400 in provincial income tax; those with families or lower incomes would have paid less.

So, four years after a massive tax giveaway to high income earners, the Campbell government provided a maximum benefit of $400 to those on the bottom, and that is the most the minister of labour can offer on the day the National Council of Welfare called attention to B.C. leading the nation with the highest proportion of its citizens suffering poverty.

The National Council of Welfare stressed that 26 per cent of poor families and 18 per cent of poor singles had a major income earner who worked full-time, all year. They also reported that 12.9 per cent of food bank clients have employment as their primary source of income. In other words, the poor are not just people on welfare. Poor people work, often full-time, in low-paid jobs.

A quarter million under $10

Statistics Canada's Labour Force Historical Review provides detailed data from its Labour Force Survey since 1997. It shows that in 2005 British Columbia had 304,400 people between the ages of 25 and 54 who worked full-time and made less than $16 per hour. When young workers and part-time workers are included, B.C. had 721,000 people earning less than $16 per hour, of whom 256,600 earned less than $10 per hour. Many of those people are the working poor who are not sharing in B.C.'s prosperity, and who appear to be invisible to the Campbell government.

David Schreck, a former NDP advisor to the premier and a management and economic consultant, publishes his political newsletter StrategicThoughts.com here.  [Tyee]

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