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B.C. Pre-Budget Holds Good, Bad And Ugly Ideas For Taxpayers

12/17/2015 01:01 EST | Updated 12/17/2016 05:12 EST
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This image shows the exterior of the ornate building that is the home of the Legislative Assembly of British Columbia, in Victoria, B.C.
Audiences love a good remake, but we shouldn't embrace The Good, The Bad, and the Ugly -- otherwise known as the B.C. finance committee's pre-budget recommendations.

The bipartisan legislative committee was asked by Finance Minister Michael de Jong to travel the province and make recommendations for the 2016-17 B.C. budget. Unfortunately, the committee fell into the usual trap of recommending billions in new spending requests put in by dozens of special interest groups.

Those presenters asked for an astonishing $18.6 billion in new spending -- equivalent to 40 per cent of the annual provincial budget and nearly 70 times the projected surplus.

There was one sliver of good news for taxpayers in the committee's report: they took the Canadian Taxpayers Federation's advice and recommended a review of the Medical Services Premium (MSP) tax, including "threshold levels, comparisons to other jurisdictions, costs of administering the program, and alternatives."

MSP has been likened to an insurance premium, but it is clearly not. Insurance premiums change based on risk factors and usage. But with MSP, healthy people pay the same as unhealthy people. A person who runs three marathons a year pays the same as someone who never leaves the couch. Smokers pay the same as non-smokers. If you don't see a doctor or visit an emergency room for years, you pay the same as someone who goes daily.

It is not an insurance premium; it's a tax. And it's a tax that has been rising at an alarming rate.

The B.C. Liberals have hiked the MSP tax 39 per cent since 2010. Families now spend $1,800 a year on that single tax, regardless of income levels. A family making $30,001 a year pays the same as a multimillionaire. It doesn't make sense.

Or, as the committee put it: "The CTF pointed out that increasing rates have proven onerous for some families and seniors, and for businesses who pay through payroll contributions." It's time to freeze and review the MSP tax and see if there are better, fairer ways of paying for health care.

The MSP review recommendation was good, as was the recommendation to continue balancing budgets. Unfortunately, none of the other 61 recommendations included any call to find efficiencies or cost savings within government. Instead, we got a dizzying array of "increased investments." Translation: more spending, more taxes, more debt. That's the bad.

The ugliest recommendation was to "explore" a tax on drinks with sugar in them. This is a terrible idea that Denmark has already abandoned, and, as this CTF report shows, would do little besides make life more expensive and create a massive bureaucracy.

Making soft drinks more expensive will make alcohol more attractive price-wise. That's not a public health gain. It will also create problems classifying sugary drinks -- if you take your coffee black, should you be exempt from the tax? Will someone be monitoring the sugar packets at Starbucks?

De Jong, a former health minister, knows this is a problem. "I'll tell you where this gets bogged down: You define what a sugary drink is ... I was a bit surprised to discover that orange juice -- orange juice! -- is a sugary drink under any of the conventional definitions," he told Voice of B.C.

As de Jong's ministry staff rightly explained, this tax is "purely a revenue measure." It's not about health, it's about money.

Hopefully de Jong ignores the committee's bad and ugly ideas, and holds the line on spending and reviews the MSP tax. Otherwise he will end up demanding another fistful of dollars from British Columbians to pay for all of the committee's recommendations. 

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