By Jane Sterk
The B.C. Liberals’ budget on March 2 was predictable, given fiscal constraints. But, nothing in the budget starts the necessary transition to a clean, green, local, resilient, entrepreneurial economy. In fact, it’s a “back to the future” budget.
The government has latched B.C.’s recovery to the continued exploitation and export of our natural resources. They predict increased prices and revenue from forestry, oil and gas, and “clean” energy. Because the American economy is still fragile, they must be counting on China and India to pay these higher prices.
Given the chronic volatility of the resource sector, the Green Party of B.C. thinks there is a good chance the B.C. Liberals are overstating revenue from these sources. In addition we think they are overstating income from personal taxes. While income is trending downwards, the Liberals predict increased revenues. The only way income tax could produce more revenue when incomes are going down is by more taxpaying people moving here. Our rates of unemployment and slow job creation make this assumption questionable.
The Liberals say they are “prudent” in predicting B.C.’s economy will grow by 2.2 percent this year, when their panel of experts averaged in at 2.9 percent. At the same time, they are predicting revenue growth of 4.9 percent a year for the next three years. Given the fragility of the recovery, these revenue projections seem optimistic.
Paying for private investment
The Liberals continue to build in roads, ports, and bridges, and give transit, cycling, and pedestrian infrastructure comparatively short shrift. Several new infrastructure announcements invest in logging roads. For Greens, this is like corporate welfare based on the view that maintaining our good life is dependent on exploiting our natural resources and we have to pay for the infrastructure that supports those activities. Amongst other things, B.C. taxpayers are paying to build roads and to bring power to oil and gas, forestry, and mining sites.
The government’s investment in infrastructure, as a way to stimulate the economy, keep construction jobs, and lessen the impact of the recession, continues for this budget year. We think a better strategy would have been to extend projects over a longer time frame—maybe four or five years. We risk a double-dip recession spending so much all at once followed by nothing.
Tax shifting—the wrong way
On top of these direct subsidies, resource industry companies benefit from all kinds of tax relief. Greens support using the tax system to get the kind of transformative change we need to shift from a resource-based, fossil-fuel economy to one characterized by value-added primary and secondary industries that are less reliant on transportation. We too would use mechanisms like flow-through tax credits. The big difference: we would shift taxes onto things like pollution, greenhouse gas emissions, and activities that poison our water, air, and soil and destroy the beauty of nature, and off those things that make our economy and communities sustainable.
The B.C. Liberals give the biggest breaks to companies whose activities do the most damage. While this budget gave a subsidy of $100 million over three years to “clean” energy, the 2008 budget gave the oil and gas industry $1 billion in subsidies over three years and more has been added since, including the $100 million for road building over two years that was in the 2009 budget. Clean energy for this government seems to equate to run of river and biomass from forestry. Greens think we need to diversify from hydro into geothermal, solar, wind, and tidal.
There must be something good
I can’t close without finding something to support. We applaud the government for putting more money into the successful LiveSmart B.C. This popular and well-used government program actually helped reduce GHG emissions and it created new green jobs. We also commend a continued commitment to the carbon tax—an essential tax to move people and companies away from fossil fuels.
Jane Sterk is the leader of the Green Party of B.C.