Friday, August 26, 2011

After the HST, government needs a clear plan

OK, the HST is gone. Now it’s time to get things back on track.

For more than two years, things have been a mess in B.C.

Politically, we’ve had a citizens’ revolt, the resurrection of Bill Vander Zalm and the ouster of Gordon Campbell.

Economically, we’ve been a mess. Tax policy has been made up on the fly. Campbell promised a 15-per-cent income tax cut, then the government reneged once he quit. The government cut corporate taxes, then Premier Christy Clark said she would increase them again if the HST survived. The Liberals said the HST was not in the plans during the 2009 campaign, introduced it, then watched as it grew increasingly doomed.

All at a time when the economy was already fragile.

Businesses, and individuals, adapt to different tax regimes. But they like certainty. If a corporation is going to invest $100 million in a mill, it wants to know that the taxes won’t suddenly change once the doors are open. If a family is going to spend $10,000 on a new roof, they want to know that waiting for the result of the HST referendum wouldn’t save them $400.

That’s been missing.

And, despite the referendum result, certainty is still missing.

No one knows what happens next.

Finance Minister Kevin Falcon has said the government doesn’t have to bring back the old provincial sales tax, with all the exemptions were in place in 2009. He said the tax could be more like the HST, applied to more goods and services, to increase revenue.

Health Minister MIke de Jong has taken the opposite view. He told Mike Smyth of the Vancouver Province that the petition and referendum questions were clear.

“The choice is the HST as it exists today, or the PST as it existed previously,” he said. “If people opt to get rid of the HST and go back to the PST as it existed in 2009, that’s what the government is going to do.”

De Jong is right. But until the government is clear, the tax uncertainty continues. And so does the risk of another taxpayer revolt, if the government tries to weasel on the referendum result.

Falcon appears, in the aftermath of the vote, to accepted that reality.

That’s just one issue in the post-referendum world.

Falcon has said that rejecting the HST would mean big changes for B.C.’s budget.

It’s time for the government to lay those out for British Columbians.

The defeat of the HST means about $360 million less in annual revenue, according to the analysis by the government’s independent panel. The federal government’s $1.6 billion incentive payment to encourage the province to adopt the tax has to be repaid over time. The PST tax office has to be restored.

So what’s the plan? Will taxes rise, and if so, who will pay more? Will spending be cut, and who will lose out? Or will the government borrow more to repay the federal government, and accept the interest costs?

They are all legitimate responses. What’s needed is a clear, multi-year government plan, so everyone, businesses and investors particularly, know the rules.

And so voters can decide whether it makes sense.

A serious government would be setting out its plan, accepting the public’ verdict.

Instead, it seems the Clark government is still considering a quick election.

That’s just irresponsible. There is no clear election issue. The Clark government hasn’t set out an agenda, or a prudent budget based on the HST referendum results.

Clark has a chance to set out her government’s plans and priorities, supported by a new budget in February. That would let voters make an informed choice.

It’s been a more than two years of stumbling government and slapdash fiscal policy in British Columbia.

Clark needs to show what alternative her government has to offer before Britisn Columbians go to the polls.

Wednesday, August 24, 2011

Four lessons from Barry Penner's departure

Four thoughts on Barry Penner's resignation as attorney general and retirement from politics.

First, there's something wrong with any system that expects politicians - or anyone - to work constantly.

Penner said he's leaving politics because he wants to spend time with his wife and six-month-old daughter, and a cabinet post makes that impossible. "I was supposed to be on holiday the last two weeks," he said. "And I think I got maybe one-and-a-half days . because of urgent issues in the ministry that had to be attended to."

BlackBerries are always buzzing and crises emerging.

Really, a cabinet minister should be able to go away for two weeks, and even take most weekends off. Real emergencies are rare. Most decisions don't have to be made instantly, and perhaps shouldn't be. Not every political issue demands immediate action.

But organizations can easily slip into phony crisis mode, where people compete to be busiest.

For example, if an article troubling to the government appears in the Times Colonist on a Saturday, the offended ministry often springs into action and fires off an email letter to the editor, supposedly from the minister, the same day or on Sunday. At least a few people's weekends are ruined.

But it's pointless. No one at the newspaper looks at emailed letters to the editor until Monday morning.

There isn't a newspaper until Tuesday.

There is no reason for the panic or the weekend work, except a desire to look busy or important.

Worse, it's unlikely we get good decisions from ministers constantly frazzled and overloaded and rushing from meeting to meeting, half-listening to staff while they scroll through emails. It's tough to think, or read, or pause for a thoughtful response when you're crushed in busy work.

It's also unlikely that we get the diversity we need in cabinet, and government. Anyone not prepared to put up with being on call 18 hours a day, seven days a week, has less chance of advancing to the top jobs.

Surely, among the driven workaholics, we want people at the cabinet table who value time with their children, or to read or make music. People who think reflection or going to a friend's house for dinner - without checking a BlackBerry surreptitiously under the table throughout the meal - are important. (I write as a reformed workaholic.)

Some politicians do maintain balance. But Penner's resignation suggests the pressures, self-imposed and external, to keep on working.

Second, while Penner certainly did not criticize Premier Christy Clark, neither did he show much support.

He resigned as attorney general now, Penner said, because Clark and the party are pushing MLAs to set up campaign teams in case she decides on a fall election. Penner felt it would be wrong to recruit campaign staff if he wasn't going to run in the next election (which, legally, is to be in 2013) and wrong to stay in cabinet if he's not running. Without the pressure to declare, he might have stayed in cabinet, he said.

And Penner made his own announcement; the premier's office didn't get the chance to manage the news.

The third point is a little complicated. I think well of Penner. I don't believe he's lied to me. He's not a jerk in the legislature. He always seems to enjoy representing the people in his riding, seeing it as a serious job and an honour. He doesn't run from issues. Sometimes, his sincerity seemed like it might be a liability in his party. I rate him highly.

But when you think about it, rating a politician highly for those reasons alone seems a little sad.

And fourth and finally, Penner's departure shows Clark is still seriously considering a fall election. The HST referendum results will be released in the next few days - Thursday is the target. Clark and the Liberal strategists have a narrow window to decide whether to call a vote, likely in October in advance of municipal elections.

Footnote: Clark's continued interest in a fall election might not be wellreceived in caucus. MLAs would have almost two years left in their terms under the fixed election date law, but face tough battles - and possibly defeats - if the vote is held this year.

Others fear the practical problems of raising money and recruiting volunteers when many political activists are already looking to the November municipal elections.