NDP supporters' dreams of good times ahead likely to be dashed
- NDP supporters' dreams of good times ahead likely to be dashed
Dix won't have much spending room if he becomes premier in May
BY VAUGHN PALMER, VANCOUVER SUNMARCH 9, 2013
On the day he launched his bid for the New Democratic Party leadership two years ago, Adrian Dix tempted the political fates by proposing a tax increase.
He pledged to bring back a minimum tax on banks and financial institutions, later saying that the estimated $100 million would be used for student grants and financial aid.
Sticking with the theme, Dix, in his third week of campaigning back in February 2011, floated a second tax increase, this time on corporate income, raising the rate from the then 10 per cent to 12 per cent. The additional revenue would be used to fund government programs, most notably transit, he said.
But having ventured those two tax increases, Dix then proceeded to try to inoculate himself against suspicions that he would take the province back to the higher tax plan that was in place under the NDP government of the 1990s.
He vowed no return to the corporation capital tax, a $4-billion cash cow for the New Democrats and widely blamed for being a barrier to investment.
Dix thereby broke with the legacy of his political mentor Glen Clark, who imposed the tax during his term as minister of finance and defended it during subsequent terms as economic development minister, then as premier.
Over the past year, Dix has also ruled out significant changes in the provincial sales tax, once it is restored on April 1. He said this is not the time to boost stumpage charges on the timber harvest. He promised not to raise the small business tax.
All those specifics were on the public record, notwithstanding the claim from Liberal supporters that he's said nothing about what he would do in government.
Ironically, some of Dix's promises amounted to a backhanded endorsement of the tax plan put in place by the Liberals.
For all the squawking by NDP supporters over the way the Liberals cut income taxes by 25 per cent on their first day in office, and cut them again in later years, Dix also ruled out a return to the higher rates that were maintained by his party in the 1990s.
"There is not a lot of room to move on income taxes, except at the high end," became his standard formulation on the issue. He also offered his definition of "high end," saying it constituted those making $150,000 a year and more.
The latter notion proved so attractive that the Liberals poached it for their own election-year budget, announcing a "temporary" levy on incomes of over $150,000 for the next two years.
They also pounced on some of the tax room that Dix had been eyeing on the corporate side, boosting the corporate income tax rate to 11 per cent, a point less than Dix was proposing.
Twice raided for his own tax proposals, Dix made light of it: "The only things they can find to staunch their credibility gap are some of my plans," he told the legislature.
"So I think it's probably the case in a few months that the public will tell them to get out of the way and have us implement what we're planning to do."
But as things stand today, the only difference of position between the two major parties on taxation is Dix's standing pledge to take the corporate income rate to 12 per cent, still well below the 16.5 per cent that was in place when his party left office a dozen years ago.
Other possibilities remain. Fees and licences. Fuel taxes. Natural gas royalties. The property transfer tax. But given the "not much room to move" messaging from Dix over the past two years, coupled with his insistence that middle-income British Columbians are already taxed to the max, I'd be surprised if he makes any major moves in that direction.
All of which has most observers assuming that Dix would take the province back into deficits to finance higher spending.
Bruce Ralston, the party's finance critic and co-chair of the election platform committee, confirmed as much when he told reporters "we're committed to balancing the budget, particularly over the economic cycle - generally, that's four to five years."
But even allowing for a relatively modest deficit of, say, $800 million or two per cent of provincial revenues, Dix and crew won't have much spending room.
For that reason, most of the interest that attaches to the still-in-the-works platform is on the spending side.
The New Democrats have previewed some of the measures that will be in the platform.
They'd move the next provincial election to the fall of 2017, end the use of public funds for partisan political advertising, severely restrict the use of cosmetic pesticides, maintain current public funding for independent schools and bring in legislation to measure poverty in the province and set targets to reduce it.
But when it comes to big-ticket spending items - publicly funded child care, reinvestment in the forests, phasing out medicare premiums, raising rates for social assistance, more resources in the classroom - far too many hopes are chasing too few dollars.
Little wonder that New Democrats are passing word to their own supporters about the platform, scheduled for release in early April.
And the word is that those with anything but minimal expectations should prepare to be disappointed.
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