05) "B.C. GOVERNMENT IS BY NO MEANS BROKE"

 

On Feb. 27, teachers held a Day of Action across British Columbia to protest the Liberal government's decision to legislate their contract. Iglika Ivanova of the Canadian Centre for Policy Alternatives B.C. office spoke to the Surrey teachers rally. We reprint excerpts from her remarks.

 

            The spin on this year's B.C. budget is so‑called "prudence" but in reality there is nothing prudent about failing to tackle the global climate crisis, reduce income inequality, adequately fund our schools, invest in community‑based supports for seniors, or reduce B.C.'s embarrassingly high poverty rate. For all the talk of preserving core public services, the budget offers only meager increases to the ministries of health, education and social assistance that don't keep pace with rising cost pressures and population growth. K‑12 education funding, for example, needs to rise by at least 2% to keep up with inflation and maintain the current levels of service; more if the province wants to address the unmet needs in the system. Instead, we're seeing what's essentially a frozen budget, a zero increase, which effectively amounts to funding cuts on the ground.

            Practically speaking, it's not real fiscal constraints that stand in our way but a lack of political will. Our debt levels are very reasonable when considered as a share of our economy, and they are among the lowest in the country. We can afford to borrow a bit more at today's record low interest rates to make capital and social investments that will make us all better off in the long run.

            Our Finance Minister Kevin Falcon claims we have no choice, but he's wrong. Our BC government is by no means broke, and the net zero mandate for public sector bargaining is a political choice, not a reflection of an economic imperative to cut costs.

            The choice our government is making is to ask us to tighten our belts and keep out wages low for the benefit of economic growth during the recovery. Once growth returns, the government has often argued, the benefits would trickle down to everyone and wages will rise as the economy grows. Our Premier made that point quite clearly in her radio appearance on the Bill Good show earlier in February.

            But the focus on pursuing jobs and growth without regard to what type of jobs we're getting hasn't paid off for BC families.

The 2008 recession and the current slow recovery are taking place in the context of a 30‑year‑long stagnation in BC family incomes. We don't hear this often, but median earnings for full time, full year workers in BC have actually fallen since the late 1970s, once inflation is taken into account. This means that over half of BC full year full time workers are earning less in real terms than their parents' generation. That's happened during a time when the provincial economy almost doubled in real terms, and real GDP per capita rose by 23%.

            But it's clear that the benefits of prosperity have not trickled down to the bottom half of the population. This raises a moral question about fairness and social justice, one that the Occupy movement brought to the forefront of the public debate just last fall.

            But it also has a direct impact on the economic well‑being of our province and our country. High inequality can diminish economic growth if it means that we are not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions. We must find a way to share prosperity more fairly.

            This all starts with a solid and well‑funded public education system. Accessible, high quality education from the early years all the way to post‑secondary is the only way to ensure economic mobility in a modern society. Providing access to high quality education for all children is the greatest equalizer we have.

And this means treating the hard working women and men who teach our children with the respect they deserve and compensating them fairly.

            There is no question that governments everywhere in Canada are facing pressure to balance their budgets. So far, efforts to reduce the deficit have disproportionately focused on cutting public sector jobs, wages and social programs. But we must remember that there are two sides to every budget - the spending side and the income or revenue side. The only proposals coming from the business sector are to cut government spending, but I think it's only fair and reasonable to look at the other side too and consider government income.

            Over the past decade, the BC government has reshaped the provincial tax system. As a result, BC now boasts the lowest personal income taxes for individuals earning up to $120,000 per year and one of the lowest corporate income tax rates in the country. The savings have been small for all but the highest-earning families and have largely gone unnoticed as user fees have risen, including MSP which is going up next year for the fourth time since 2009. And a number of public services have been scaled back or suffered from declines in quality due to underfunding.

            But these tax cuts have done considerable damage to our collective capacity to care for one another and protect the environment. If we were collecting taxes at the same share of the economy now as we were in 2000, we'd have $2.5 billion more. Every year.

            The way the government got people to support tax cuts is by hiding the consequences. Low taxes sounded like a good idea to be people. Good idea until such time that you or somebody you love needs the services that the tax cuts have starved. Until you see how big your child's class is and how many kids with special needs are in it who don't receive the supports they need to learn well.

            Until you have to get rushed into the overcrowded emergency room and treated in the hallway. Until you find out how long the waiting list is for your aging mother to be assessed for supportive housing.

            This highlights a need for a public debate on a key question: do we really want BC to be a low tax society with low wages and frayed public services? Because this is where the government's current budget is leading us.

            At a time when BC families are already stretched by record high debt levels and a weak labour market, the way out of this economic slump lies not in lowering the wages and benefits of teachers and other public sector workers, but in having stronger and more accessible public services, starting with education.

(The above article is from the March 16-31, 2012, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)