As I write, it has been just a few days since the provincial election. As was the case for most of you, the result was unexpected. We are still processing what it means for our work and rethinking some of our research plans.

For those of us who engage in deep thinking about policy ideas, this election felt very shallow. Certainly both major parties could have done more to promote discussion of the issues. It makes us question the value of careful and thoughtful policy development. Does the work of a research institute like ours even matter when so many political debates seem to unfold “fact-free?”

Many of you are no doubt disappointed about a host of lost opportunities — you hoped for more action on poverty reduction, the restoration of some funding for key public services, the first steps towards a child care plan, a clear “no” to tar sands pipelines, etc. Nevertheless, it’s time to regroup, refocus, and turn our attention back to the longer-term struggles ahead.

Here are a few of the initial lessons I draw from the election, and what it means for a progressive research institute like the CCPA — because I do think our work matters, more than ever:

• Progressives need to do a better job of presenting a compelling and convincing alternative vision for jobs and the economy. People understandably feel anxious about their economic security and future employment. This is particularly true in communities where jobs are currently heavily reliant on the resource sectors. And thus the election turned on the issues of jobs and the economy. If we don’t believe the jobs of the future should be based on the extraction and export of fossil fuels, then we must do better at laying out what a clean — and moral ­­— economy looks like, linked to concrete job targets. 
• We need to be bold and hopeful.  A key lesson from this election: as people consider the future, big ideas and ambitious goals are more attractive and inspiring than modest and cautious ones.  People are looking forward, and want to sign on to a vision that offers economic and employment security, and speaks to the core societal challenges we face — climate change, growing income inequality, persistent poverty, and the affordability squeeze felt by so many families. (I made a similar argument back in January as the election was ramping up, which you can find here.) I believe our organization has a vital role to play in articulating such a hopeful alternative vision. And we need to translate that vision into a compelling narrative.
• Our policy solutions and alternative vision need to speak to people in all regions. The BC political map is starting to look disturbingly like the “Blue States” and “Red States” we see emerging from US elections. That’s not healthy. It’s not just an urban/rural divide, but also a city/suburb divide. The dominant issues and concerns that people wrestle with play out differently across the province. So as we develop a compelling alternative economic vision, we need to ensure it is not rooted in an “urban bubble” divorced from the realities that many communities face.
• We need to better connect with and excite young people. The desire for a bold and hopeful vision of the future is particularly acute among young people. And in its absence, they remain disengaged from electoral politics. Young people need to feel inspired if they are to engage. I’m convinced the CCPA–BC’s work on climate justice and poverty reduction has the potential to connect in this way.
• The issues of resource development, fossil fuel exports and pipelines figured very centrally in the election, and will be defining issues in the years ahead. We are at a crossroads. Importantly, a majority of BC voters chose parties that were unequivocally opposed to the building of tar sands pipelines, and even the BC Liberals were compelled to lay out five conditions such developments must meet. Those fights will now continue in various realms. At their root will be the question of whether BC wants to build more and more infrastructure that locks us into a dying economy, or whether we want to choose a different path towards a zero-carbon economy.  The CCPA–BC’s work on climate justice, fracking and LNG, and fossil fuel exports, combined with our ongoing work on green jobs, will figure prominently in those debates.
• The BC government is going to be facing some serious fiscal challenges in the coming years (the legacy of 12 years of tax cuts), and if major cuts to services are to be avoided, we need to raise new revenues. The CCPA–BC is committed to identifying and advancing options for how to do that in a fair and effective manner. Our new Tax Project has a vital role to play in making the case for equitable tax reform.
• There is a stark disconnect between people’s values and how these issues play out in the context of an election. On balance, the values and desires of most British Columbians remain relatively progressive. You see this reflected in polls that explore attitudes and policy preferences in a meaningful way (as opposed to the horse-race polls about party preferences). But too often, these values fail to find electoral expression, either because they are trumped by other factors, or more likely, because none of the main parties articulates a compelling plan of action.  And far too many feel alienated from the political process and don’t vote.  Importantly, the results of the election should not be taken as a majority support for a neo-liberal agenda.
• We need to better understand why so many people feel disengaged from politics and key policy debates.  To me, the most depressing figure to emerge from the provincial election was the fact that barely over half of eligible voters chose to exercise their franchise. Who are the non-voters, and why do they feel so disconnected and uninspired? The CCPA–BC is working on a new initiative that tackles the problem of democratic malaise and disengagement. We believe the problem of growing inequality, and the impacts of neoliberal political culture on the public’s relationship with politics and government, are central and need to be better understood. This new project will also seek to expand what we mean by democracy — it’s not just about voting once every few years; it’s about participating in key decisions as they arise, and we want to develop models for how to enable meaningful participation on a large scale.

That’s just for starters. We have more thinking, processing and planning to do.

Overall though, I’m convinced that the work of research institutes like ours will continue to serve an important function in a democracy.  Ideas matter. Facts matter. Hope matters. The work the CCPA does holding governments to account, and documenting the impact of their policy choices, remains essential. Most importantly, the thoughtful development of an alternative policy agenda remains vital — if we are to present the public with a different path forward, one based on more equality, economic security, and a planet that is livable for our children and grandchildren, institutes like the CCPA have a key role to play.

My first post-election thoughts were to return to Mexico. Admittedly the politics there are more corrupt and the stakes far more severe, but the spirit of the people and the culture, not to mention the weather that is as relentlessly sunny as the campaign advertising was relentlessly annoying, would have been very therapeutic.

But instead, for reasons I can only attribute to a misdirected childhood, I decided to read the holy grail underpinning the Liberal campaign — the Ernst & Young and Grant Thorton consultant studies on the potential revenues to the B.C. government from LNG development in B.C. It was the big numbers in those reports that presumably led the Liberals to claim that a vote for them and their LNG plans was a vote for a debt free B.C in 15 years. “It was the choice BCers could make”.

Of course, there was nothing in the Ernst & Young and Grant Thorton studies that could lead one to conclude that LNG development would enable B.C. to be debt free in 15 years.

Firstly, both studies, in classic ‘economic impact’ consulting tradition, did not provide estimates of the incremental net revenues the government could expect. Their big numbers included, for example, the estimated income taxes paid by all of the workers directly or indirectly employed by the project, as if none of those workers would otherwise have been employed and paying taxes; and none would have been in-migrants, increasing the need and government expense for medical, school and other public services and infrastructure that they and their families would require.

Nor did the studies consider and net out the increased investment and debt, not to mention financial loss, that BC Hydro would incur if, as Premier Clark has indicated, it were to build Site C and other projects to supply the new LNG plants. And, needless to say, no offset costs or ‘debt’ of any sort was considered in respect of the GHG emissions the plants and related upstream gas production would cause.

But even more fundamentally, neither study provided forecasts of any kind. They both explicitly stated that their numbers were simply the product of a set of assumptions about growth, price spreads and other factors over which they had no confidence. As Ernst & Young stated: “The calculations of projected revenues are based on assumptions as set out in this report which may or may not materialize… the actual revenues that may be received by the Province from the LNG projects may differ significantly from these projections”.

Even more pointedly Grant Thorton stated: “The estimates are not forecasts and this report is not intended to attribute any probability that those impacts will occur or will not occur in the future”.

The reports provided big numbers. In the campaign they were used to advertise relentlessly a very big lie.

However, what worries me about the Green party position on LNG is not so much their assessment of the economic benefits from LNG. Rather it is their suggestion that somehow the development of wind, run-of-river and other such renewable energy would be a much more beneficial industry for British Columbians to pursue. Aside from the fact that developing renewable energy is not a substitute in any sense for the development of LNG for export, it makes no economic or environmental sense to implement policy that would accelerate the development of those projects in British Columbia.

Of course British Columbia has more renewable energy sources that it could develop. The catch though is that British Columbians would have to pay for it. There are no lucrative export markets waiting for high cost, B.C. renewable energy supply. And if there were, projects serving those markets would be going ahead. The Greens call for additional renewable supply would only come about if BC Hydro were forced to buy or develop  more such energy sources than it otherwise needs or could justify.

If that sounds familiar, it is. The Greens are essentially calling for a renewal and presumably expansion of the Liberals’ widely discredited Energy Plan. As we now know, that plan forced BC Hydro to buy renewable energy it did not need, imposing losses of hundreds of millions of dollars per year — losses that have contributed greatly to the sharp, upward pressure on BC Hydro rates. It was not a good economic strategy for anyone but the IPP industry that got contracts for power it could not otherwise sell. It is no wonder that the IPP industry lobby group, BC Clean, is supportive of the Greens’ renewable energy position.

As for the environment, it is never a good strategy to build projects we don’t need and that are not in the broad public interest. Renewable energy projects may not emit GHGs, but they can have significant land and resource effects. It would be far better for the environment to concentrate on conservation and energy efficiency than to go back to the Liberals’ discredited Energy Plan. Study after study indicate there is tremendous economic conservation potential that for a variety of reasons we have not yet exploited.

There will be green and renewable energy industry pressure on whatever party forms the next government to force BC Hydro to develop or buy renewable energy we don’t need and can’t justify. It’s the ‘green’ thing to do. But I would argue it is ‘green’ pressure we should try to resist for it will, as it has in the recent past, raise green issues of a different kind.

But is too much of the public debate around this election focused on reducing the size of government?

The message to British Columbians from the BC Liberals’ campaign seems to be that an active government is the enemy of a healthy economy, and that the best way to tell if a government is doing a good job is to look at how much they are spending (the less, the better). This cannot be further from the truth. A strong, well-resourced government is not in contradiction with a healthy economy. In fact it is often government spending, including on staff to create and enforce appropriate regulation, that creates the conditions for businesses and communities to thrive.

Governments fund and maintain the transportation and energy infrastructure essential for business, they enforce contracts through the justice system, educate and train a large potential workforce and keep it healthy, set fair rules of the game, protecting honest business from unscrupulous competition, and the list goes on.

And often it is government itself that creates good family-supporting jobs, either though employing people directly in public services, through commissioning and building infrastructure, or via Crown corporations. The for-profit business sector doesn’t have a monopoly on creating wealth or jobs: the public sector, Crown corporations, non-profits and the cooperative sector all contribute significantly to our economy.

The paradox of thrift

If the Global financial crisis of 2008 taught us anything, it’s that too little regulation is damaging for our economy and that government investment can play a key role in getting a slow economy going (remember the stimulus). When consumers and businesses are hunkering down and not spending, government must step in and invest. Otherwise, resources stay idle, unemployment grows and the economy moves to an even bigger slump.

Economists call this the paradox of thrift, the idea that while making cuts in lean times to “live within your means” makes sense for individual businesses and families, when everybody does it the result is a self-reinforcing economic slowdown and stagnation (due to a drop in aggregate demand). Investment is central to the functioning of the economy, and when consumers are not spending and business isn’t investing, despite sitting on large amounts of cash, it’s the job of a good government to pick up the slack.

The biggest economic problem facing BC faces at the present time isn’t the deficit, our debt levels (which are manageable), or excessive government spending and regulation. Our biggest problem is our stagnating family incomes, driving up already high levels of household debt, combined with a weak housing sector and slow business investment, which keep the unemployment levels relatively high.

Tracking BC’s spending

It’s no coincidence that one of the largest investments currently underway in BC is the $8 billion ship-building contract from the federal government (yes, a public expenditure). The economic benefits of this contract for BC are estimated to far outweigh the impact of the 2010 Winter Olympics, another economic boost for the province brought to you by government spending.

It’s in this context that our political parties are accusing each other of being big spenders. The numbers, however, show no evidence of government “overspending.”

Contrary to the popular rhetoric, the BC NDP government of the 1990s largely followed the national trend of government spending cuts, as shown in the chart below. This chart tracks BC government spending from the early 1980s to the present, and then adds two short lines capturing the spending plans contained in both the BC Liberals and the BC NDP platforms.

When measured as a share of the economy (or GDP), BC government spending under the Consolidated Revenue Fund (CRF) declined in both the 1990s and the 2000s, and is now at levels significantly lower than in the 1980s. (The new BC government accounting system, based on Generally Accepted Accounting Principles (or GAAP), introduced in the early 2000s shows essentially the same story, though the numbers for government spending are slightly higher because they include the net expenditure of school districts, universities, colleges and health organizations, known as the “SUCH” sector, and Crown corporations.)

Sources: BC Ministry of Finance, British Columbia Financial and Economic Review 2008 (Table A2.8) and 2012 (Tables A2.8, A2.14). BC Liberals Platform (same as BC Budget 2013), BC NDP Platform.

Notably, the spending proposals of the NDP platform and the BC Liberals Platform (as outlined in the 2013 BC Budget) are strikingly similar when expressed as a share of GDP. Both represent a decline in the size of government as a share of the economy, though the BC Liberals are proposing a slightly larger decline.

The BC Liberals have made much of the NDP’s election spending platform being “unaffordable”, but the reality is that the $2 billion of extra spending proposed is over three years and only amounts to a 1.5% increase over the spending plan outlined in the BC Liberal government’s February Budget. A 1.5% increase is hardly something to write home about, much less to make billboards of. In fact, the two parties’ platform spending commitments are barely distinguishable in economic terms. Political posturing and advertising aside, the BC NDP is only proposing to increase government spending by a very modest 0.4% of GDP in 2015.

There is, as you see, no evidence to support claims of government “overspending” at any point over the last 25 years. Our current fiscal crunch is the result of a revenue shortfall, caused by a decade of steep tax cuts followed by a global recession and a fragile, slow recovery. If anything, the slow economy demands bolder government investment than either government contender is prepared to put forward.

Spending protects what’s precious

But beyond the macroeconomic effects of government spending, what our government spends money on matters a lot. Back in the early 2000s, the BC government of Gordon Campbell argued that the best thing a government can do for the economy is cut taxes and simply get out of the way. A Ministry of Deregulation was created with the aim to reduce regulations by one third, as if these regulations were simply useless paperwork to make life difficult for citizens and businesses.

You know who has very limited employment standards regulation, lack of oversight and enforcement capabilities? Bangladesh, where a garment factory building recently collapsed, killing over 700 workers. And Texas, where a fertilizer plant explosion in mid-April killed 14 people, injured over 200, and damaged homes and schools in a large blast zone around it. And because the government of Texas does not require insurance for hazardous activities, the plant only held insurance of $1 million, vastly inadequate to compensate the town for the damage the explosion caused.

It’s the entirely preventable industrial disasters like the ones in Bangladesh and Texas that underscore the crucial role of government. In both cases, due to lack of oversight and enforcement on the part of the local governments, the companies were operating despite it being known that they were not following existing safety measures.

Lack of regulation, oversight and enforcement capabilities are not just an issue for workplace safety. Without sufficient public sector staff, resources and authority for this staff to do their job, we cannot protect our environment, responsibly steward our natural resources or take care of BC’s most vulnerable children. Deep cuts to the BC public service, documented in my recent CCPA report Reality Check on the Size of BC’s Public Sector, have compromised our government’s ability to do its job well.

Deep cuts that wound

Almost weekly now, there are media reports of the direct effects of public sector cuts.

• The Ombudsperson’s report on seniors care painted a picture of a system in crisis, where too many of our elders age and die without adequate supports and without dignity, clearly the result of underfunding and a failure to provide oversight and regulation.
• Child protection services are being repeatedly flagged as failing our most vulnerable children. Here again, gaps in services are directly linked with short-staffing and impossible workloads for MCFD social workers.
• We have a legal aid system in shambles, where an increasing number of marginalized people are having to represent themselves. Justice isn’t being served after funding for legal aid was cut by 40% in 2002, and 45 legal aid offices across the province reduced to two regional legal aid centres.
• Employment standards in BC are not being enforced after the Employment Standards branch lost a third of its staff and half of its offices in 2002. The shift from a pro-active inspection system to an online self-help kit for reporting and resolving workplace standards violations led to a dramatic reduction in complaints being made, but few believe it made the system fairer.
• The Forest Service lost a quarter of its staff and half its district offices over the 2000s, undermining out ability to engage in forestry management and oversight.

Big picture reality check

This is the true legacy of cuts in government spending and public sector jobs, and the inevitable flip side of over a decade of tax cuts. And these cuts have failed to deliver on their promises of job creation and shared prosperity.

What are BC’s political parties proposing to do about this should they win the election? The BC Liberals platform includes another core review of the public service in search of addition “savings,” otherwise known as more cuts. They continue to insist that resource extraction and export is the only way to create jobs, and that job creation is the only solution to poverty, glossing over the large low wage sector in BC, which fails to pay a living wage.

The BC NDP platform reinvests marginally in the BC public service by hiring more teachers, education assistants, librarians and counselors in schools, more social workers to support vulnerable BC children in care, more home support workers to provide care for seniors, by proactively enforcing employment standards, and strengthening environmental review standards for resource projects in our province. But in all these areas, the planned reinvestment is very modest.

The big picture reality check: neither the BC Liberals nor the BC NDP have a record of overspending, and neither have presented platforms that would change that.

—

This article was originally published in The Tyee.

As many readers of this blog will know, back in February the CCPA (with the assistance of a number of our partners in the Climate Justice Project) published an Open Letter to the BC political parties calling on them to recommit to BC’s legislated greenhouse gas reduction targets, and to table plans for how to achieve them. The GHG reduction law was passed in 2007, and obliged the government to reduce BC’s emissions by 33% below 2007 levels by 2020, and 80% below by 2050.

You can find the open letter here.

Over 65 organizations signed that open letter, representing thousands of British Columbians.

Climate issues have indeed received some welcome profile in this election, and in some of the platforms. Consequently, it is possible to offer some assessment of where the parties have landed with respect to climate action.

Our friends at the Pembina Institute have published a very helpful platform analysis, which you can find here.

Pembina’s analysis includes a useful matrix analyzing the platforms with respect to a few key action areas. But I thought I’d offer below my own quick assessment, with particular reference to the call in the open letter. With respect to re-committing to BC’s 2007 legislated GHG reduction targets:

• The Liberal platform is silent on this. They highlight past actions (such as introducing the carbon tax), but do not explicitly re-commit to the law.  And their platform centers around a dramatic increase in natural gas production and LNG development, which would make honouring the law effectively impossible (as Marc Lee explains in a report you can find here).
• The NDP platform does re-commit to the law. It states an NDP government will: “Renew BC’s Climate Action Plan to meet BC’s legislated greenhouse gas emission reduction targets, and lead the call for a national energy and climate strategy.” The platform includes some other specific measures, including some green infrastructure investments and expanding the carbon tax to cover vented emission from natural gas production (an important move). And notably, the NDP has stated clearly that it opposes the expansion of both the Enbridge and Kinder Morgan pipelines (a welcome move that shows they have listened to the growing opposition to increased tanker traffic). That said, these plans alone are unlikely to get the province to the 2020 legislated GHG targets. And while the NDP do not present the same unbridled enthusiasm for LNG as the Liberals, they are supportive of LNG development, which if realized is at odds with meeting the GHG targets.
• The Green Party also re-commits to law, and spells out numerous policies for the province to reach the targets, including continued increases to the carbon tax. And unlike the other parties, they have a stronger position against fracking shale gas and LNG.  The Green Party formally responded to our Open Letter, and their response is posted on the page linked to above.
• The Conservatives makes no commitment to the GHG reduction law, and elements of the platform  – such as eliminating the carbon tax and expanding oil pipelines — would take the province in the opposite direction. 

According to The Tyee, a three page advertorial for the Canadian Coal Association “extolling the virtues of BC’s coal industry” in last week’s Globe and Mail has been deemed by Elections BC to not be third party election advertising.

For those who haven’t followed the third party election advertising issue and don’t realize at first glance why this is making my head explode, you can get a feel for how broad, confusing, and problematic the rules are here or here.

According to The Tyee story, Elections BC determined the 3-page spread — which looks like regular news content but is really one of those sneaky propaganda inserts — is not election advertising because the coal association apparently didn’t pay for the space. Setting aside the fact that this strains credulity,* I think Elections BC’s interpretation is plain wrong.

Section 228 of BC’s Election Act defines the value of election advertising as,

(a) the price paid for preparing and conducting the election advertising, or
(b) the market value of preparing and conducting the election advertising, if no price is paid or if the price paid is lower than the market value.

Section 229.1 further states,

The sponsor of election advertising is whichever of the following is applicable:
(a) the individual or organization who pays for the election advertising to be conducted;
(b) if the services of conducting the advertising are provided without charge as a contribution, the individual or organization to whom the services are provided as a contribution;

So it doesn’t matter whether the Canadian Coal Association paid for that 3-page spread or not. They received the services, and the fair market value of those services is what counts.

In the meantime, the election advertising rules are chilling many citizen-based groups and other small spenders engaged in public interest education and communication. These groups have difficulty interpreting the extremely broad and confusing definition of advertising, and many err on the side of caution in trying to comply with the rules. Charities also have to deal with the possibility that registering as an election advertiser could put their charitable status at risk. For more on this how plays out, see these recent stories in The Georgia Straight and The Tyee, or the study I co-authored documenting the impacts of the rules during the 2009 election.

To give you a sense of how perverse third party rules are in practice, here are a few scenarios to consider:

• A group of seniors in an assisted living facility feels their rents are being hiked unreasonably. They get together and create a flyer talking about the fact that BC’s Residential Tenancy Act doesn’t cover assisted living facilities. They distribute the flyer to other residents and their family members. Before they distribute the flyer, they are supposed to register as an advertising sponsor with Elections BC.
• An environmental NGO with an annual budget of $50,000 tweets the statement, “BC needs green jobs, not more fracking and LNG.” The NGO isn’t registered as an election advertising sponsor. They’ve just engaged in illegal advertising, the penalties for which can include fines and jail time.
• A registered charity that provides services to vulnerable children and youth wants to make sure the issue of child poverty gets some attention during the election campaign. It puts out word through its network that it needs some volunteers to help get the job done. A few people respond, and the volunteers donate their time creating and circulating some basic online resources about child poverty and what could be done about it by the next provincial government. The resources are posted on the organization’s website and Facebook page. Not only do these resources count as advertising, but the time these volunteers spend helping out counts as an election advertising expense. That’s because volunteer labour is not excluded from the definition of a third party election advertising expense in the Election Act (see above) — unlike the definition that applies to advertising by political parties and candidates, which does explicitly exclude volunteer labour. The charity is supposed to assign a market value to these volunteers’ time, and report it to Elections BC as money spent on advertising.

But hey, if you can convince a major national daily newspaper to front you a few pages of news-y content, you’re all clear. Who do I call at the Globe to get some of that free space anyways?

* As my friend Vince Gogolek over at FIPA pointed out, it’s not like the newspaper industry is doing so great these days. If the Globe did “give” the space to the Canadian Coal Association, I can only assume it was part of an arrangement to create coal industry-friendly content that would attract coal industry advertisers. Which it did.

The PRC has now published its analysis of where the parties have landed. You can find a summary table here.

And below is an opinion piece on the subject co-authored by PRC organizer Trish Garner, Ted Bruce and myself.

A Poverty Reduction Plan for BC: Government spending saves money in the long-term

By Ted Bruce, Trish Garner and Seth Klein

We’ve heard a lot about government spending recently. The Liberals released their “spend-o-meter” charting the supposed overspending of NDP promises, and the NDP’s response has been to assert their careful spending. What neither of them are saying is that government spending has the potential to be an investment for British Columbians. It can rebuild the social supports that British Columbians need, improve economic productivity and save money in the long-term.

The fact is that poverty is costing us billions in this province. Higher public health care costs, increased policing and crime costs, lost productivity, and foregone economic activity add up to $8-9 billion per year. In contrast, the estimated cost of a strong, comprehensive poverty reduction plan once fully phased in over a few years is $3-4 billion per year. Let’s stop mopping up the floor and fix the hole in the roof.

British Columbia has the highest rate of poverty in Canada, but is one of the last provinces left without a poverty reduction plan. 510,000 people live in poverty in BC and 87,000 of those are children. To address this crisis, a poverty reduction strategy needs to set out a plan with legislated targets and timelines to boost the incomes of low-income households and provide much needed public goods, like social housing, universal child care, training and education, and preventative and community health care.

Given this, what are the commitments from the four main political parties – Liberals, NDP, Conservatives and Greens – to address poverty? There is not enough space to go into detail here – for that, you can read their platforms on their websites – but here are some brief insights into their approaches.

The Liberals state that their ‘Jobs Plan’ will tackle poverty but it does not address barriers to employment such as lack of child care. The NDP promise to introduce a poverty reduction plan with legislated targets and timelines, which is good news. But their target to lift 8,400 children out of poverty over 4 years, less than 10% of those currently living in poverty, is inadequate. The Greens aim to end poverty through a Guaranteed Livable Income combined with comprehensive programs. The Conservatives recognize the need for higher wage jobs and “a strong social-safety net” but provide no details as to what that would contain.

The Liberals claim that child poverty has decreased by 45% since 2003. This misses the significant fact that it increased by 35% in the first 2 years the Liberals were in power and that BC remains worse than most other Canadian provinces.

The Liberals “Job Plan” is not enough to tackle poverty. Most poor people already have a job in the paid labour force. According to the latest Child Poverty Report Card from First Call: BC Child and Youth Advocacy Coalition, 43% of children living in poverty in BC live in families with at least one adult working full-time for the whole year, and the majority live in families with at least some paid work. HungerCount 2012 shows that 16% of households accessing food banks in BC last year had income from current or recent employment.

The NDP would take some steps called for by the BC Poverty Reduction Coalition. Most importantly, if they form government in May, tabling poverty reduction legislation will be a priority.

The biggest piece of the NDP’s plan is the BC Family Bonus, which would be provided to all low-income families, both those on welfare and those in the low-wage workforce. It targets those families that most need it, those who earn $66,000 or less, while the Liberals’ benefit would be provided in full for families earning up to $100,000 per year and is then phased out up to $150,000. The Family Bonus also has a broader mandate, covering families with children under 18, not merely those under 6 as the Liberals’ tax benefit would.

The NDP have also promised to address the inaccessibility and unaffordability of child care by increasing spaces and reducing fees by 20% for infant and toddler spaces. The Liberals have made a commitment to increase spaces but have not addressed the skyrocketing fees. As the Coalition of Child Care Advocates state in their platform analysis, the “commitment to reduce parent fees is a small but significant step that moves the province towards the child care system that British Columbians have said they want and need – the $10/day Child Care Plan.”

In terms of post-secondary education, the NDP have committed to needs-based non-repayable grants for students and the Liberals would provide a one-time $1,200 contribution towards a Registered Education Savings Plan for children born since 2007. While the NDP’s approach will improve accessibility for low-income students, neither will address record-high tuition fees and student debt. In contrast, the Greens have promised a similar grant program, as well as reducing tuition fees by 20% and eliminating the interest on student loans (to be phased in over 5 years).

The NDP situate the lack of mental health supports as a major contributor to poverty and promise an investment in mental health and addiction treatment and outreach, in particular for children and youth. They also commit to expanding home support and community care for seniors, people with disabilities, and those living with chronic conditions, and would establish an independent seniors advocate as per the BC Ombudsperson’s recommendations. The Liberals promise to work with partners to provide more addiction spaces, new hospice spaces and additional home support for seniors.

The Greens recognize the social determinants of health and are committed to an approach to health care focused on prevention and community services. They promise to phase out MSP premiums, a flat tax that only British Columbians pay and that adversely affects low-income families. The Conservatives highlight that the Liberals health care spending per capita is below the national average and “support the concept of a strong publicly-funded health system” but no specific details are given.

Neither the Liberals nor the NDP have committed to addressing the inadequacy of income assistance. The Liberals introduced some marginal improvements to the welfare system in October, such as reinstating the earnings exemption of $200 for single people and increasing it for people with disabilities to $800, but have made no commitment to addressing welfare rates, which have been frozen since 2007. They also increased the 3-week wait to access welfare to 5 weeks, and the NDP have made no comment on this punitive measure, which has already caused evictions and homelessness.

The NDP commit to indexing welfare rates, doubling the earnings exemption for people without disabilities to $400 and re-introducing the child maintenance exemption up to $100, but the promise to raise the rates by a mere $20 per month in 2 years is completely inadequate. As Raise the Rates highlight, the “total $630 a month welfare rate won’t be enough to allow single people on welfare to both rent a cheap place to live and buy nutritious food.”

In relation to housing, a recent analysis from the Canadian Centre for Policy Alternatives shows that the Liberals have provided just over 400 social housing units per year over the last 8 years. In their platform, they have made no new housing commitments.

The NDP platform includes building “up to 1,500 units of affordable non-profit, co-operative and rental housing for low- and moderate-income families, seniors and individuals each year by leveraging the existing $250 million Housing Endowment Fund to support partnerships and equity contributions with local governments, the private sector, and the non-profit and co-operative housing sectors.” Notably, up to 1,500 units sets that as the maximum, implying less may be built per year, and even 1,500 falls far short of what’s needed to keep up with population growth and reverse the homelessness crisis. The financial commitment is inadequate and would not be used to build directly but combined in partnerships with private developers.

The Green Party promise to commit 1% of the annual provincial budget (or about $450 million per year) to solve the housing crisis, as well as advocate for a national housing strategy.

The centerpiece of the Greens’ approach to addressing poverty is a Guaranteed Livable Income. While this has the potential to lift people out of poverty and replace the current bureaucratic, punitive welfare system, caution must be taken with a GLI. Most significantly, minimum wage legislation is still necessary, not “irrelevant” as the Greens state, because business must play a role in providing adequate incomes for people. If there is no minimum wage, businesses may pay very low wages, leaving the public to pick up most of the bill through the GLI program.

It is clear that whichever party wins the upcoming election, much more work remains to be done to convince our political leadership to implement a strong poverty reduction strategy that will make a real difference in people’s lives. So talk to your local candidates in the next week, vote for the party that best addresses your concerns about poverty in BC, and then join us after May 14 in advancing the call for a fulsome and ambitious poverty reduction plan.    

Ted Bruce and Seth Klein are co-chairs of the BC Poverty Reduction Coalition (BCPRC), and Trish Garner is the BCPRC Organizer. Ted Bruce is also the past President of the Public Health Association of BC, and Seth Klein is the BC Director of the Canadian Centre for Policy Alternatives.

A summary of party responses to the poverty reduction call can be found here.

Child poverty isn’t a question of jobs: 9 of the 17 cities with lower child poverty rates than Vancouver experienced higher rates of unemployment in 2010. This is why it’s so important to talk about the living wage in Vancouver (and wages in general).

St. John’s in Newfoundland had the highest child poverty rate of all Canadian cities (15.8% or one in every 6 children). Vancouver saw the second-highest child poverty at 13.8%. Kitchener-Cambridge-Waterloo and Hamilton (both in Ontario) had the lowest urban child poverty rate in the country, lower than Canada’s non-urban child poverty average of 5.1%.

Statistics Canada reports on child poverty rates in selected municipalities with a total population of at least 100,000 (known to statisticians as census metropolitan areas). The data are updated every summer and can be found in CANSIM table 202-0802.

* Victoria, BC is also included in the Statistics Canada’s census metorpolitan area child poverty statistics, but the 2010 survey sample was deemed too small/unreliable for Statistics Canada to release a separate child poverty estimate for the municipality.

We have been surprised, to say the least, at the lack of public discourse around health care during this election period.  As a top-of-mind issue for British Columbians, you’d think it would be as central as the always large and looming economy. So what are the burning issues in health care, and how do the party platforms stack up? Here’s our take, with a particular focus on seniors.

The challenge:

When we talk about “health care” we’re talking about a large and complex system that includes three major areas: primary care (family doctors and health centres), acute care (hospitals and emergency services), and home and community based care (services for seniors and others who require support in their homes, communities or residential facilities).  There are also issues related to technology, drugs, education and training, funding models, integration across different parts of the system, patient rights, privatization …and more.

Health care is by far the largest expenditure in the provincial budget. Dire warnings in recent years about the financial “sustainability” of Medicare have prompted fears that aging baby boomers will soon overwhelm the system, leaving few resources for the needs of younger generations. The CCPA has published extensively on this issue, pointing out that it is the costs associated with new health technologies, such as new surgical techniques, diagnostics, prescription drugs, and end-of-life interventions that are key cost drivers, not the growing number of seniors. And our research has shown how we can improve access to surgical care and prescription drugs while also helping to contain costs.

But when it comes to seniors and the aging population, the home and community care system is particularly vital. Ask any community seniors group in BC how this system is doing and you’re likely to hear a similar story: it’s more of a fragmented patchwork of services than a system, it is extremely confusing to navigate, and seniors and their families are ending up in impossible situations as a result. It is a story well-documented by BC’s Ombudsperson in her recent landmark systemic investigation into the crisis in seniors care.

Problems of underfunding and lack of coordination date back to the 1990s, but worsened significantly over the last decade due to reduced access to services and poorly planned restructuring. Between 2001/02 and 2009/10, for example, access to residential care dropped by 21%, and access to home support dropped by 30%. As the July 2012 CCPA study, Caring for BC Aging Population: Improving Health Care for All finds:

Restructuring in home and community care – such as changes to policies that govern when seniors get access to what types of care – has also undermined the vital prevention role these services can play. In both residential care and home support, eligibility criteria have become increasingly restrictive, to the point that seniors often have to wait until they are in crisis and admitted to hospital in order to get the community services they require. Even then, services can be difficult to access.

The impact of these changes can be seen in the 35% increase since 2005/06 in hospital beds occupied by patients who couldn’t be discharged because the appropriate residential or home health services were not available.

A solution:

A more comprehensive and better-coordinated system of home and community care can help seniors stay healthy and independent, reduce pressure on hospitals (the most expensive part of health care), and make things easier for those caring for aging family members. Based on our research and extensive work with community seniors groups, these are priority actions we hope the next provincial government will move forward over the coming two to four years:

• Increase access to public, not-for-profit home and community care, especially home support.
• Fully implement the BC Ombudsperson’s comprehensive recommendations, which provide a roadmap for a more coordinated and accountable system of seniors care.
• Establish an independent seniors advocate with a broad mandate that includes systemic advocacy.
• Create a more integrated system – or a “one-stop-shop” approach — so that seniors can access a continuum of services as their health needs change. Integration also means better coordination across the acute, primary and home and community systems.

It is important to note that seniors health is also supported by access to affordable housing, transportation, adequate income, and social supports that help prevent isolation and loneliness.  Seniors may also be more likely to experience ill health and/or be marginalized depending on their gender, immigration status and number of years spent in Canada, level of education, sexual orientation, culture and ethnicity.

The platforms (in alphabetical order):

BC Liberals

As the governing party for over a decade, the BC Liberal platform must be considered in the context of the current situation. There aren’t any major departures in the platform, where the focus remains on funding health care infrastructure ($2.4 billion over the next 3 years) and educating and retaining health care providers. The platform boasts a 23% increase in publically subsidized assisted living, residential care and group home beds since 2001 (combined). However, this figure doesn’t account for the increase in the seniors population during that time. When we instead measure access to services (ie, the number of beds relative to the number of seniors over 75), it turns out that access to residential care and assisted living combined dropped by 9% between 2001/02 and 2009/10. For residential care alone the drop was a much steeper 21%.

The Liberal platform does not make any commitments to enhance funding for home and community health care services, with the exception of a $5 million per year increase in funding as of 2014/15 for a United Way program that uses community volunteers to help seniors with home-based tasks. A Liberal government would also “partner with the health care community” to develop cost-effective and appropriate dementia care, and partner with hospice organizations to “encourage development” of new hospice spaces.  Neither of these ideas come with financial commitments, despite a promise to double the number of hospice beds by 2020.

The Liberal government has already addressed the issue of a seniors advocate, with legislation introduced earlier this spring. The new office’s mandate includes a number of positive elements, but is created as a “within-government” position rather than as an independent office of the legislature (like the Ombudsperson, Auditor General, and Child and Youth Advocate). This is a vital distinction if the advocate is going to play a strong role in holding future governments accountable for their policies and actions. It is also what community seniors groups and advocates across BC want to see – which was communicated very strongly during a provincial consultation process held last year.

The platform is largely silent on the issue of better coordination and integration of health care. It also does not address the question of fully implementing the BC Ombudsperson’s recommendations. The Ombudsperson says the provincial government has “made progress” on about one quarter of her recommendations. But according to a recent Province newspaper story, MLA Ralph Sultan, who served as the Minister of State for Seniors, says  “his government’s overhaul of the senior-care system is adequate and, about ‘as done as it is going to be done’.”

BC Conservative Party

The Conservative Party platform makes fairly general statements and is not fully costed (they describe it as an “intentionally incomplete,” living document).  There is no discussion of seniors in the Conservative pre-election party platform.

The Conservative Party does, however, have a policy document published in September, 2012 that provides more detail, and in which seniors issues are addressed directly.  In broad brushstrokes, it commits to “establishing programs to assist our seniors with access to lifestyle activities and services” to enable seniors to age in place. The document also speaks to the need for integration of the system by “coordinating, enhancing and improving accessibility to existing services.” These sound positive but lack concrete policy actions or financial commitments to support them. The document also names a Seniors Advocate “at the Ministerial Level,” meaning not independent.

In regards to health care in general, the Conservative pre-election platform and the more detailed policy document serve as a reminder of why the basic principles of the Canada Health Act — universality, accessibility, comprehensiveness and portability — are so important.  These are the principles that mean our system provides care based on need rather than ability to pay. The Conservative platform suggests more “flexibility in the delivery of health services, including consideration of a balance of public and private options”. Introducing more private, for-profit delivery into our system would undermine the Canada Health Act.

The Conservative platform does not speak to implementing the Ombudsperson’s recommendations.

BC NDP

The NDP proposes  new initiatives primarily focused on community-based services and integration. The platform commits to improving home support and community care for seniors and people with disabilities ($70 million over the next 3 years), enhanced standards of care in residential facilities for bathing, toileting, recreational activities and culturally appropriate care ($35 million in 2015/16), and promises to “establish an independent Seniors’ Representative” ($11 million over the next 3 years). It also commits to “improve access to multi-disciplinary health clinics and teams” ($35 million over three years) — a positive step towards reducing pressure on hospitals and creating a more patient-focused, integrated health system.

The NDP Platform does not mention the Ombudspersons Report or commit to full implementation of her recommendations, though it does address some of the key issues identified in her investigation.  In terms of improving quality and standards of care, the NDP propose renewing and redefining the Health Quality Council to support innovation and accountability in the system. They also plan to restore the Therapeutic Initiative’s role as a BC drug watchdog (the current government officially ended its funding on April 22, 2013), which helps keep our provincial drug costs low and provides up to date prescription practice guidelines to BC physicians and pharmacists.

Finally, relevant to the CCPA’s recent attention to the issue of affordable housing for seniors living in BC, the NDP have said they will “strengthen and rebalance” the Residential Tenancy Act and Manufactured Home Act to “better protect tenants and landlords.”  At the moment, there is seriously inadequate protection for seniors living in Assisted Living facilities, manufactured homes, and Seniors Supportive Housing – we hope such revisions will work in the favour of tenants living in these spaces.

Green Party of BC

The Green Book provides valuable insight on what we should be aiming for to build a just and healthy society, with a more holistic, less medicalized approach to health and health care.  The platform reflects what health research shows – that a focus on prevention, community-based care, and choice and dignity for patients leads to positive health outcomes and cost savings for a broader health system.  The platform highlights the importance of addressing the inadequacies in seniors health care today, and argues that it is not more funding but a “fundamental reallocation of existing resources” that is currently needed to address our health system woes – especially the integration of home, community, and primary care services. This is an important point – though it is an ambitious undertaking. Certainly in the short term, additional funding to build capacity in the home and community care system is needed to support a broader shift in how we organize and deliver health care.

The Green Book is not costed, though it highlights the importance of addressing inadequate staffing levels and funding for residential care units, improving social support and public reporting, and making a concerted effort to implement the recommendations from the BC Ombudspersons report, the Green Book hits many of the right notes.  Finally, while they advocate for “independent review of all public reporting”, the Greens make no direct comment on their position on an Independent Seniors Advocate.

–

Of course, platforms are not policies and this is all conjecture until the next government is elected.  We encourage you to review the party platforms yourself and decide who you wish to vote for.  Once the election is over, we also encourage you to remember what was promised, and hold the next government’s feet to the fire to deliver — and more.

This fact sheet highlights the importance of communities that are inclusive and accessible to people of all ages and abilities.  And, while it is important for seniors to “age in place,” they must also be able to leave their homes, carry out daily activities, engage in their community and visit friends and family. Supportive services that prevent isolation are a key determinant of seniors’ quali­ty of life, health and independence.

We provide some recommendations to government and accompanying questions to centre the conversation on ensure our elders age with dignity, retain their independence as long as possible, and access public and community spaces as easily as the rest of the population.  Our recommendations highlight the value of  health care integration, transportation tailored to the needs of seniors, and non-medical home support, as well as a call for government to invest in community based organizations that provide social gathering spaces (like seniors centres and neighborhood houses).

The fact sheet is available for download here - please share far and wide, take to your all candidates meetings, and create a thoughtful and informed debate with seniors at the centre!

The more interesting public policy issue, however, is whether it is a worthy objective in the first place. Should we be striving to eliminate all provincial debt (including all P3 long term contract obligations — debt in a different name)? And should we be using all the royalties we can extract from export-driven natural gas development to do that?

I would argue no.

There is no question that excessive debt can impose unfair burdens on future generations. But so too can inadequate investment in infrastructure and the environment. It is both sides of the ledger we need to consider — the physical, social and natural assets, not just the debt we leave behind. The objective should be balance and fairness. There is no reason to believe zero public debt would be balanced or fair.

As for the royalties that we can extract from natural gas, that depends very much on the costs we require the natural gas industry to pay.

In the election debate, the Premier stated that we need to build the Site C hydro-generating station to supply LNG plants. But would those plants pay the full costs of Site C power, last estimated by BC Hydro at $110/MWh. Or would they pay something closer to BC Hydro’s standard industrial rate — almost one-third of that. If it is anything close to the standard industrial rate it would not be natural gas royalties paying down our debt, rather it would be BC Hydro ratepayers who would ultimately have to pay for the massive subsidy that the below-cost supply of electricity would entail.

And if the LNG plants were to meet their power needs with natural gas, would they pay the full cost of offsetting the greenhouse gas emissions that would cause. In any event would the industry pay the full costs of offsetting all of their greenhouse gas emissions in the production and transport of natural gas.

It seems to me that calling on the industry to pay the full costs of the electricity it buys from BC Hydro, as well as the full costs of offsetting all of the greenhouse gas emissions it generates would be far fairer to present and future generations than using subsidy-supported royalties to pay down debt. Put another way. it is paramount to know what resource rents or royalty potential we really have before allocating it to the elimination of debt.

The living wage invites all of us to think about the actual costs of raising a family in our communities: rent, child care fees, food and transportation costs, for example. And when we look at the numbers, we find that the costs of the basics is rising considerably faster than general inflation measured by the Consumer Price Index (CPI). The Vancouver living wage rose by 48c since last year, which is 2.5% or almost double Vancouver’s CPI increase of 1.3%.

The living wage reports released today reveal a big gap between the low wages a number of us earn and the real costs of raising a family. Child poverty is a serious concern in our cities, and it’s not just a problem for single-parent families. The numbers speak for themselves (all from Statistics Canada’s Cansim table 202-0802):

• 13.8% of Metro Vancouver children live in poverty (based on Statistics Canada’s after-tax LICO). Only St. John’s in Newfoundland has a higher child poverty rate of the 20 largest Canadian cities surveyed by Statistics Canada. The average Canadian child poverty rate is 8.2%.
•  11.6% of Metro Vancouver children in 2-parent families live in poverty. This is double the Canadian average of 5.7%, and considerably higher than the city with the second-worst 2-parent-family child poverty record, London, Ontario with 9.3%.

Many more families have incomes above the poverty line threshold but are struggling to cover basic expenses. In Vancouver, we estimate that a 2-parent family with 2 children needs an income of $64,940 after taxes to cover their costs of living. Taking into account all the federal and BC income tax, CPP and EI premiums and all credits and subsidies available for families, we estimate that the family needs to earn $71,400. With both parents working 35h/week year-round, this works out to an hourly wage of $19.62.

About 41% of Vancouver’s 2-parent families with 2 children had incomes of less than $75,000 before tax in 2010 (according to Statistics Canada data in Cansim table 111-0013).

How did those earning less than the living wage manage? Many take on debt, which is one reason why household debt is continuing to grow. In many cases, low wage families just do without. They live in constant financial stress, they don’t have the means to fully participate in the civic and cultural lives of their communities and their children are at a higher risk of not being ready to learn when they get to school.

Jobs make a good political slogan, but the reality is that working poverty remains a problem Canada and it’s time we started paying attention to wages too, not just jobs. Skills training can only take us so far.

As Michael McCarthy Flynn, the Organizer of the Living Wage for Families Campaign reminds us (in this great opinion piece):

“the creation of well-paying jobs also brings with it an increase in low-paid service-sector jobs. Every time a new hospital, university, mining or technology firm opens it doors, leading to the creation of many well-paid jobs, it also leads to the attendant creation of a number of low-paying jobs that are usually contracted out to service these institutions’ auxiliary needs, such as security, catering, cleaning or even general administration.”

At the end of the day, we can’t all be doctors or engineers, we can’t even all be plumbers and electricians. Even the highest-skilled knowledge economy needs line cooks, cleaners, security guards, servers, retail store clerks. What does it mean to have these jobs pay wages far below the costs of living in our communities?

The good news is that both businesses and governments can do a lot to make things better. Large employers can commit to paying their staff the living wage for their community. 35 employers in Metro Vancouver have already done that.

Importantly, the living wage can be achieved through a combination of cash and benefits: paying for workers’ MSP premiums, providing subsidized transit or extended health benefits reduce the amount that employers need to pay to reach the living wage family income (for more information, see this handy online calculator).

Governments can get involved both as an employer — by paying all government workers a living wage — and as a service provider. Child care is the second-largest family expense for a Vancouver family with two children and reducing the costs of child care can go a long way. The $10/day Child Care Plan, for example, would reduce the Vancouver living wage by $3.36/hour for both parents to $16.26/hour.

Affordable housing, more convenient public transportation options, accessible post-secondary education and skills training, more generous child benefits — all these policies can greatly improve quality of life for working families who earn low wages. To see how much different government policies will reduce the living wage, see this online calculator.

BC has acquired the “distinction” of being home to Canada’s largest income gap, highest poverty rate, and second highest child poverty rate.  It also has greater employment insecurity and lower wages than the national average, even though BC is the province with the highest cost of living in Canada.

How has this occurred in such a rich province?

The answer is at least partially due to the low-wage policies the BC government has implemented in the 21^st century through changes to the Employment Standards Act (ESA). These changes, beginning in 2001, represented a dramatic roll-back of worker rights.

Employment standards deal with crucial labour protections that provide rules for how employers can treat workers.  Standards on the minimum wage, hours of work, when overtime pay begins, parental leave, and provisions for vacations and statutory holidays with pay are just some of the protections ensured.

These provisions are important for everyone in the paid labour force, but they are especially necessary for vulnerable workers, who are disproportionally women, recent immigrants, temporary foreign workers, racial minorities and young people.

Looking at the minimum wage alone indicates the importance of employment standards. Statistics Canada estimates 136,000 British Columbians (7.2% of the workforce) are working for minimum wages (and sometimes even less), and that nearly half of these low-waged workers (46%) are employed by firms of 500 or more employees.   A growing proportion (31%) are 35 years old and over. Thousands more have wages only marginally above the minimum wage.

A key piece of the government’s low-wage strategy, starting in 2001, was to freeze the general minimum wage at $8 for 10 years, resulting in BC having the lowest minimum wage in the country. At the same time a $6 minimum wage was established for those in their first 500 hours of work, something that was aimed at teenagers, but also affected vulnerable workers such as recent immigrants. The $6 minimum wage remained unchanged for 10 years until it was finally abolished in 2011.

Starting in 2002, approximately 42 changes were made to the ESA.  Most of these changes involve reductions to employee rights and protections, and a substantial erosion of enforcement of the law.  Here are some of the most significant:

• Farm workers’ wages were effectively cut by excluding them from key protections such as hours of work, overtime and statutory holiday pay, and the definition of farm work was substantially expanded to include other food processing jobs.
• Government oversight of employed children between 12 and 14 was eliminated, and children were permitted to work up to 7 hours per day and 20 hours per week, making BC stand out as having the youngest working age for children in the industrialized world.
• Unionized employees were excluded from the core provisions of the ESA, which means they have no access to the complaints, investigations, and enforcement and appeals provisions of the Act.
• The minimum daily shift was reduced from 4 to 2 hours, something particularly hard for those organizing child care or other part-time work.
• The 24-hour notice of a shift change was eliminated.
• Employees with a complaint no longer have quick access to an Employment Standards Officer for help.  Instead, they are required to fill out a 16-page “self-help kit” and pursue their complaint with their employer themselves before proceeding further with the Employment Standards branch. This totally discourages workers from filing complaints of violations.
• Other significant changes affecting employees’ ability to get help was a 33% reduction in Employment Standards Branch staff, a 47% reduction in enforcement officer staff, and the closure of 50% of the Employment Standards Branch offices.

These are just a sampling of the many changes that have undermined the earnings of lower-wage workers.

When these changes were introduced the government stressed they were necessary to increase ‘flexibility’ in the labour force and would benefit both employers and employees.  We now know with certainty that these policies have been an abject failure from the perspective of employees.  They have simply made BC a low-wage province and have lowered the ability of working people to provide for their own needs. The next government will need to restore enforcement of the ESA, and strengthen the law itself to ensure workers are properly protected.

Yaffe raises the spectre of economic doom because of the NDP’s opposition to a number of major projects. Much like the proponents’ themselves, she decries the jobs that may be lost if these projects do not go ahead. People will apparently have to go to Alberta, she suggests, to find work.

Of course, what she doesn’t say is that it won’t be British Columbians out of luck, because for the most part it won’t be British Columbians who would be hired if these projects go ahead. Virtually all labour market analysts are forecasting major shortages of mining and construction related trades. The workers for the new projects Yaffe is so concerned about would largely come from other parts of Canada and the rest of the world. There is little reason to believe that these projects would hire skilled British Columbians who would otherwise be unemployed. Those people just aren’t there.

That isn’t to say that the projects do not offer any benefit. They can provide programs and support for the upgrading of skills. They can generate tax revenues and increased income for British Columbians.  The problem is, they can also have significant costs.

The Prosperity mine project, for example, is fiercely opposed by First Nations and local environmental groups because of the impacts it would have on highly valued environmental and cultural resources. It would also have significant economic costs for British Columbians. Like other new projects requiring large amounts of electricity, the Prosperity mine would impose financial losses on BC Hydro of tens of millions of dollars per year — losses that British Columbians would have to make up in higher rates. There may be benefits but there is no credible evidence that these benefits, assessed in accordance with widely accepted economic principles, outweigh the costs.

Another project Yaffe mentions is the proposed Jumbo Glacier ski resort, and the hundreds of jobs it may offer. This project too is fiercely opposed by First Nations and local residents because of its impact on a highly valued remote wilderness area. And it also has economic as well as environmental costs. It will displace an existing heli-skiing operation. It will almost certainly displace  activity and spending at existing ski resorts in British Columbia and Alberta. And whatever incremental jobs it generates will not be filled by British Columbians. Ski resorts are already recruiting workers from all parts of the world because they can’t fill existing let alone new jobs with local workers. The net benefit this projects offers, if any,  is very unclear.

In the end all of these projects entail trade-offs. Careful assessments are required and judgments must be made. And ultimately the decisions that different parties make will reflect the values they hold — the weight they assign to different consequences. But being opposed to projects that by all accounts raise major issues and costs does not mean one is opposed to development. It is simply a judgment, as the federal government decided in its rejection of the original Prosperity mine project, that the project is not justified in the circumstances.

Yaffe could have argued why these projects are in fact justified notwithstanding the major costs they entail. She could challenge the assessments and the relative values that have to be made to reject them. I could respect that. But the mindless partisan rant with no recognition of the trade-offs and judgment that must be made is a disservice to all. It certainly does not inform and enhance what should be very important political debates.

If what follows sounds familiar, it’s because I’m drawing heavily from the analysis I did in 2010 here, here and here. All of these critiques continue to apply to the 2013 report, which is based on the exact same problematic methodology as earlier editions employed.

The Fraser Institute’s report claims that the total tax bill of the average Canadian family now takes up 42.7% of their income and has increased by 1,787% since 1961 (without adjusting for inflation). These are big numbers, but when we look closely at how they are constructed, it becomes clear that the Fraser Institute doesn’t even come close to measuring the tax bill of what most people would think of as the average or a representative Canadian family.

The Fraser Institute’s definition of the average Canadian tax bill includes all personal and business taxes, import duties and resource royalties (i.e. the rents we charge for natural gas extraction, water use and timber logging) collected by the Canadian government divided by the number of households in the country. This is an easy calculation to make, but unfortunately it does not correspond to what individual families actually pay; it is too broad to be meaningful and takes no account of the distribution of income and taxes between business and families or between individual families at different levels of the income ladder.

A much better, though considerably more calculation-intensive way to get at the Canadian families’ tax bills looks at the taxes families actually paid, using Statistics Canada’s SPSD/M model. My colleague Marc Lee did this in his 2007 report Eroding Tax Fairness. Here’s what he found:

Marc Lee found that the total tax rate for families in the middle of the distribution in 2005 (deciles 4, 5, 6) was around 35% of income, with lower income families paying less and families in the top 1% also paying less as a share of their income, as the figure above shows.

By focusing on the average tax bill per Canadian household (which is different than the ordinary Canadian family’s tax bill), the Fraser Institute report misses out the biggest problem Canada has with its tax system today: the erosion of tax fairness. We’ve seen some fundamental shifts in who pays taxes in this country since the 1990s:

• A shift of the tax bill from business to families (achieved through large reductions of corporate income taxes and a proliferation of business subsidies and tax credits)
• A shift of the tax bill from higher income to middle and modest income families (achieved through personal income tax cuts at the high end and an increased reliance on regressive taxes)

At the same time, overall taxes have actually fallen for all but the lowest-income Canadian families since 2000, as shown in the figure above (and in the Fraser Institute report’s figure 4). Tax revenues have correspondingly fallen as a share of our economy, which is why many services all Canadians rely on are now overextended or scaled back. Canadian families feel squeezed because our tax system is unfair, not because we’re collecting too much overall in taxes.

But back to the Fraser Institute’s Consumer Tax Index report. Here are three main issues with the conclusions they draw:

1. The representative/ordinary Canadian family does not pay for the average (or mean) business taxes levied in the country, not does it pay for the average (or mean) personal taxes. With income distributed so unequally and highly concentrated among the top 1% of Canadians, the average tax bill is a meaningless mathematical construct. For example, research shows that most, if not all, of the business tax bill falls on investors (not workers) and given how unequally distributed shareholder profits and investment earnings are these days, the average has become meaningless — it’s artificially pulled up by those with higher incomes and does not represent the experience of most families. Taking the average (mathematical mean) doesn’t make sense when talking about personal income taxes, which are progressive, with rates that increase with income. For example, both main parties running for government in BC’s May 14 election have proposed a tax increase on incomes over $150,000. This tax increase will only affect the top 2% of British Columbians, while 98% of us will not see our taxes change. Yet, a future year Fraser Institute Consumer Tax Index report will be showing a small increase in the average family’s tax bill with their current methodology.

Statistics Canada’s latest taxfiler data tells us that individuals in the top 1% paid on average 33% of their income in federal and provincial income taxes while the bottom 90% paid an average of 12% of their income. The Fraser Institute’s report estimates that the average family spent 29.1% of their income on taxes, so you see the problem here.

2. Even if we overlook the distributional issues and accept the Fraser Institute’s numbers, knowing that the average family pays a higher percentage of its income in taxes today than the average family paid in 1961 doesn’t answer the question of whether this is too much or too little. We need to take account of what Canadians get for their taxes to make that kind of judgment. The Fraser Institute report, however, completely misses this part of the equation.

Canada’s made much progress since 1961. We established Medicare (starting in Saskatchewan in 1962) and introduced the Canada Pension Plan (CPP) in 1965, boosted education programs for our children, and modernized our infrastructure to name just a few. These things cost money, so of course taxes have increased.

What’s important to note is that the average Canadian family in 2012 got more out of public programs and services than the average family in 1961. And that if we weren’t pooling our resources together in taxes, we’d still have to pay for healthcare, education, infrastructure and provide support to our elders. The only difference is that we’d have to pay privately, as individuals, and those who can’t afford it would have to go without. For most of us, this would mean a lower quality of life, more insecurity and less money in our pockets, not more.

In addition to providing services, a large chunk of government’s tax revenues flow back to Canadians in the form of direct transfers, such as old-age pensions for our elders, EI payments for the unemployed, and child benefits for parents. The Fraser Institute includes government transfers in their calculation of family income, but you won’t find this out in this edition of the report – you need to look up a 2008 Fraser Institute book that is cited in the report to get at their definition of family income (or family cash income, as they call it). Well, I did, and I found that family cash income includes wages and salaries, but also unincorporated non-farm income, interest, dividends, private and government pension payments, old age pension payments, and other transfers from government.

Without getting into a discussion of what percentage of Canadian families receives income from dividends and other investments, and how meaningful averages are when the distribution is so unequal, let’s just note that old age pension payments and other government transfers account for a large share of the average family’s cash income. In 2007, the latest year for with Fraser Institute numbers are available, they estimated that the average family received $2,125 in old age pension and $8,344 in other government transfers, for a total of $10,469 or 16% of their “cash income” of $66,496.

On average, then, almost half of the family’s total tax bill came back to them in the form of direct transfers from government. The other half was used to pay for services like education, healthcare, policing, justice, road construction and repair that Canadian families used and benefited from. This doesn’t seem like such a bad deal, after all. It’s curious that the Institute decided not to publish this part of their calculation since the 2008 edition of the report.

3. Comparing the average Canadian’s tax bill to the costs of shelter, food and clothing is neither here nor there. With economic and social progress, societies move towards spending less of their incomes on basic survival and having surplus value left over for other pursuits like leisure, better education, better health. It’s not surprising that the cost of basics consume a lower share of Canadian family income in 2012 than in 1961, it would be very worrisome if it didn’t given our economic growth since the 1960s. Comparing the taxes we pay to improve our quality of life through better health care, education, environmental protection and infrastructure development to a number that’s bound to go down over time (expenses of shelter, food and clothing) is a gimmick to make the tax bill appear to be larger and growing faster than it actually is.

The main tax issue facing Canada isn’t that average Canadians are paying too much taxes, but that high income Canadians and profitable businesses are paying too little. For more on that and how to fix it, see this recent CCPA report I co-authored with Marc Lee.