Friday, July 24, 2009

The HST, Gordon Campbell and the Clark government

The "harmonized tax" plan makes me wonder if the Campbell government has lost its way.
It's not the plan's substance, in fact, though there a lot of questions about the costs and benefits for different groops.
It's the way Gordon Campbell, with no warning or consultation, imposed a major tax change. The new tax system will shift taxes from business to individuals. Some industries will win and some - like the restaurant business - will lose.
The tax plan wasn't mentioned in the election campaign three months ago. There have been no discussion papers or reports. The Liberals rejected calls for the harmonized tax and said the change wasn't on the agenda.
And then imposed it.
Here are the basics. Right now, individuals and businesses pay seven-per-cent provincial sales tax and five-per-cent federal GST on most goods and services they buy.
The federal government - and many business groups - would like to see one harmonized tax. Three provinces have already merged the GST and provincial sales tax - Newfoundland, New Brunswick and Nova Scotia.
Campbell proposes to follow them with a 12-per-cent merged GST and PST, effective next July 1. The tax will go to Ottawa, and B.C. will be sent its share.
But that's just the start. Businesses can deduct GST they pay from their tax bill. Now they will be able to deduct PST as well, as it is included in the harmonized tax.
That will save them - and cost the government - about $1.9 billion in what had been provincial sales tax. That's a 37-per-cent drop in PST revenue.
But Campbell said the change would be revenue neutral. The overall money coming into government, needed to pay for schools and hospitals, would not go down.
Which means someone else is going to have to pay the $1.9 billion that business will be saving.
Most likely you. The new tax will apply to a long list of things that you didn't pay PST on. Heating oil and natural gas, cable and telephone, restaurant meals and non-prescription medicine. Movie and airline tickets and real estate commissions and dry cleaning and new house prices. You get the picture.
The theory is that while you will pay more in taxes, the companies will pass on their tax savings to you. It will work out.
There are benefits. Companies say that filing one sales tax return will cut their costs.
The federal government will give the province $1.6 billion for making the change, part of a national incentive plan.
And Campbell said that as other provinces give tax breaks to business in this way, B.C. had to follow.
The three Atlantic provinces aren't significant. But Ontario is proposing a harmonized tax for July 1, 2010 - the date B.C. now proposes to introduce its version.
Ontario's approach is strikingly different. Premier Dalton McGuinty started talking about the harmonized tax in January. The proposal was set out in the budget in March, with reports on the effects on business and families. The government pledged to use the federal incentive payment to cushion the impact of the change - most families would get transitional payments of $1,000 - and to exempt many goods. It also pledged to help affected industry sectors - tourism, for example would get an extra $40 million a year for marketing efforts.
Even the language was different. McGuinty's budget said the tax changes would be made "pending legislative approval and Ontario and Canada signing a tax co-ordination agreement."
Campbell presented a done deal. MLAs, both Liberal and New Democrats, might as well be cardboard cutouts. The public's views were not of any interest.
Campbell said the harmonized tax issue wasn't even on the radar for him at the time of the election campaign. Odd, since Ontario had announced its intention before that.
So, in a little over two months, the premier noticed tax harmonization and worked out a whole plan.
It reminds me of the last couple of years of the Glen Clark government. Too much certainty, too little planning, too bold enthusiasms and too little interest in the views of anyone outside the inner circle.
And that, we know, ended in tears.

Thursday, July 23, 2009

Rolling the GST and PST into one tax

Gordon Campbell and Colin Hansen left a lot of questions with the announcement of a Harmonized Sales Tax that would - mostly - combine the GST and PST into one 12-per-cent tax.
It's the kind of big change that could have been debated during the election campaign, except it wasn't on the radar for him three months ago, Campbell said. (Which raises questions about how well the details have been thought through.)
It also could have been useful to invite public comments on such a sweeping tax change.
There are benefits and drawbacks, which I'll write about once there is a little more information.
For now, there are more questions. For example, the premier says the change will reduce sales taxes for business by about $1.9 billion.
And he says the change overall will be - more or less - revenue neutral.
So who is going to pay $1.9 billion more to make up for the cut for business?
More to come. . .

Latest secret cuts hurt those who most need help

It seems bad public policy - even dumb and destructive - to cut supports that help people get off welfare and into jobs just as more people are being forced onto income assistance.
Or to cut efforts to improve literacy, one of Gordon Campbell's "five great goals" of 2005.
But those are among the measures the provincial government has chosen to deal with its botched budget.
The NDP released leaked documents this month that show the government knew in early June that its income assistance caseload projections were wildly inaccurate.
The budget was based on the assumption that 112,000 people would be on welfare by the next fiscal year; the documents show the caseload is now expected to "to peak at 147,000 in June 2010."
That's 24 per cent higher than the forecast, an increase that represents suffering for individuals and families and a $100-million budget overrun. (The revelation comes after the government's public affairs bureau intervened to suppress the regular monthly release of income assistance caseloads during the election campaign. The statistics - which were released during the last two campaigns - would have showed a 50 per cent jump in the number of employable people on income assistance in just six months.)
The documents also reveal the government is attempting to deal with its errors by cutting needed services.
A June 5 memo announced an immediate freeze on "direct purchase" funding for people on income assistance. That's a ministry program intended to help people on welfare find and keep work.
In areas where there is no contractor supplying employment programs to government, for example, income assistance workers have been able to approve job readiness training for clients who were capable and keen to work, but needed help.
Direct payments were also available for literacy training for people on income assistance and to cover small costs like textbooks and transportation. They were used to cover high school level upgrading courses for people whose lack of education was preventing them from finding work.
And in all cases, funding was only available if the person on welfare had demonstrated commitment, motivation and ability in the hunt for a job.
What sensible person could think these cuts make sense?
Income assistance rates are desperately low in B.C. A single person who is considered employable receives $375 a month for shelter and $235 a month for every other expense - that's less than $8 a day for food, transportation, clothes and everything else.
Which leaves no money for the basics required for job hunting. Direct payments were the solution, a small amount of money available to provide needed help in making the transition from welfare to work.
Cutting it is cruel, of course.
It's also foolish. Helping people off income assistance reduces the long-term costs substantially.
And as Campbell has noted, the longer a person is on income assistance the greater difficulty they have in escaping.
The literacy cuts show a similar short-sightedness.
Last year, the government announced funding for 16 regional literacy co-ordinators.
Advanced Education Minister Murray Coell said the co-ordinators would help make improvements urged by the auditor general. "Regions are often faced with challenges matching up people with the programs and services they need and making all the various literacy programs work together efficiently," Coell said.
Now the jobs are being cut to try to keep the deficit down.
It's an odd approach for a government that has identified literacy as a key to the province's future - and the need for economic stimulus. Firing people and weakening the literacy effort hardly accomplishes either goal.
Add in the news - revealed by Sean Holman at - that libraries across the province face funding cuts and reports that support for university and college students is being chopped, and a pattern is emerging.
The greater worry is that these cuts are just symptoms of rushed, arbitrary and ill-considered efforts to slash programs and jobs across government at great cost to people and communities now, and the province's future.
Footnote: None of these cuts are being announced publicly. The government is proceeding by stealth - a great contrast to the flood of pre-election announcements of tiny funding programs and a betrayal of commitments to "openness and accountability."

Wednesday, July 22, 2009

Reconciliation act is dead on the vine - what next?

The provincial government had high hopes its proposed recognition and reconciliation act would bring "seismic change" to relations with First Nations in the province.
But the plan has collapsed in the face of native concerns, as this memo shows, and its back to the drawing board.

July 14, 2009

Dear UBCIC Chiefs Council,

Re: Proposed Recognition and Reconciliation Legislation Process-to-Date and Next Steps

The UBCIC Executive takes this opportunity to provide an update regarding the proposed Recognition and Reconciliation Legislation.

The legislative initiative was a step which the UBCIC, First Nations Summit and BCAFN mandated the FNLC to advance with the Province, designed to compel the Province to implement commitments contained in the New Relationship (2005), including to recognize Aboriginal title and rights, to respect First Nations' laws and responsibilities, to reconcile Aboriginal and Crown titles and jurisdictions, and to close the socio-economic gap through agreements about revenue and benefit sharing.

In February 2009, a "Discussion Paper on Instructions for Implementing the New Relationship" (the "Discussion Paper") was released to generate dialogue on the proposed legislative initiative. A series of regional sessions and community visits to explore the content of the Discussion Paper have been held with First Nations across the Province, and these are continuing.

In many ways, the first several community/Tribal group visits represented a 'test drive' of the original discussion paper. Based on the feedback, it is clear that many concepts expressed in the Discussion Paper are unacceptable. Concerns have been raised, including that 'reconstitution' will interfere with self-determination; that the Indigenous Nation Commission could become another bureaucracy; that there is risk of including Aboriginal title recognition in legislation which also recognizes Crown title in any form; that the nature, scope and substance of the title being recognized will weaken the title recognition within s. 35. We have heard questions raised whether the Province has jurisdiction to pass such legislation, and doubts expressed whether they will implement it. Questions have also been raised about the absence of Canada.

We have also heard expressed the opportunities which title recognition could bring. Consistently we heard the message, "we generally accept and support the concept of the need to achieve recognition, but not in its current form". In other words, not as currently articulated in the original Discussion Paper. The Discussion Paper has done its job, but it has now become an impediment to carrying forward a constructive and productive dialogue.

Consequently, on June 25th, the FNLC made a decision to 'set aside' the discussion paper to provide the space and opportunity to carry on an inclusive and cohesive dialogue. The Recognition Working Group ("RWG"), who had been instructed to develop with the Province language that might serve as detailed instructions to legislative drafters, has been directed to stop that work and not engage in any legislative drafting.

We believe our decision has significantly improved the tone of our dialogue; both politically and legally. When we finalize our Regional and community sessions, we will be in a position to deliver a summary report to the delegates of a Provincial-wide meeting at the end of August.

We welcome the formation of a lawyers' caucus comprised of First Nations' lawyers who wish to participate, who are working together to prepare other options for consideration at the All Chiefs' Assembly this summer.

We are at an important time in answering the land question. We have an opportunity unlike any other in our history. The Province has been compelled through law and politics to agree to recognition of title. We must use this opportunity well. Through recognition legislation or other initiatives, we must now compel the provincial government and every civil servant to act based on recognition and not denial of Aboriginal title. Now it is time to listen to our communities. We believe we will be given clear direction in terms of a 'forward looking' mandate when we next meet.

United we stand; divided we perish. We will work together to identify consensus for the steps we will collectively take together.


Grand Chief Stewart Phillip

Chief Robert Shintah

Chief Robert Chamberlin

Tuesday, July 21, 2009

The uranium file

Although professionally predisposed to have an opinion on anything, I'm uncertain on uranium mining. If global warming is a real issue, nuclear power beats coal-fired plants. And without uranium, you can't nuclear power.
The provincial government is more certain. It has taken two shots at discouraging development of potentially significant deposits, in part because they're in the Okanagan. People don't want to retire to uranium country.
New junior minister for mines Randy Hawes told Sean Holman, on CFAX 1070's Public Eye, that the public doesn't want uranium mining and the government accepts that. Hawes refused an invitation to see Saskatchan's uranium mines.
Meanwhile, a second mining company has sued the government over the pre-election uranium mining ban, arguing their rights were expropriated and they are owed compensation.

E-mails might, finally, move B.C. Rail case forward

Slowly — so slowly — British Columbians might be moving closer to some answers in the B.C. Rail corruption case.
It’s been a dismal performance from the courts and the politicians. More than five years after police raided legislature officers and talked about the long reach of organized crime, the affair hangs over the government and the three accused.
That might change with B.C. Supreme Court Justice Elizabeth Bennett’s ruling that the government must produce e-mails from Premier Gordon Campbell and a clutch of current and former cabinet ministers and their staff.
Or it might sink the whole affair even deeper into an ethical and legal quagmire.
We’ll find that out, perhaps, Aug. 17. That’s when the government’s lawyer will tell the court whether the e-mails exist, or if some or all have been destroyed. (An astonishing number of lawyers — all taxpayer-funded — are involved in the case. Costs have been estimated at more than $10 million and counting.)
The government’s story has been changing.
Last month, its lawyer introduced a deposition from an official saying the e-mails from 2002 to 2005 and all backups had been erased.
That appeared to violate government policy, which calls for records to be kept for seven years. (Transitory e-mails — like a message confirming a lunch date — are exempted.)
Last week, the government offered a new deposition from the same officials saying that at least some of the relevant e-mails had existed but were ordered destroyed in May, during the election campaign.
If true, that’s serious on several levels.
First, destroying evidence is a criminal offence. The relevance of the e-mails to the trial should have been obvious since the raids. It was certainly clear once the defence lawyers asked for the documents in 2007. The RCMP has already been asked to review the information to see if an investigation is warranted.
Second, if the evidence is gone, defence lawyers have a reasonable argument that the charges should be dismissed due to the government’s abuse of the process. That would leave the questions unanswered.
Third, the government would face a political crisis. Campbell has pledged complete openness and co-operation with the investigation since the days after the raid.
Barring some remarkable explanation — I can’t even think of an example — the destruction of the e-mails being sought by the court would look like a cover-up. And while governments can escape a great many failings and missteps, cover-ups tend to taint their reputations and relationships with the public permanently.
It’s a potentially toxic mess, stemming from the broken 2001 campaign promise not to sell B.C. Rail but spreading to include questions about the influence of well-connected Liberal insiders, the legitimacy of the bidding process and, now, the missing evidence.
The Crown is alleging Dave Basi, ministerial assistant to then finance minister Gary Collins, and Bob Virk, who held the same position with transport minister Judith Reid, accepted benefits from Omnitrax, one of the B.C. Rail bidders. In return, the Crown says, they provided inside information about the bidding process.
The defence denies that and says the two were actually acting on behalf of their political masters. The bidding was rigged all along to ensure CN got B.C. Rail, the defence alleges. The government wanted Omnitrax kept involved to preserve the appearance of a real bidding process. (CP Rail had dropped out because it believed the bidding process was unfair; a partner bidding with Omnitrax had pulled the plug for the same reason.)
And all of this, remember, after a promise by Campbell not to sell B.C. Rail.
It is a bizarre situation that two provincial elections have been held since the raids and allegations of corruption, with no answers for the public and only silence from the government.
And, if the e-mails have been destroyed and the case is thrown out, those answers might still be years away — particularly if the investigation into the destruction of evidence moves at the same halting pace.
Footnote: The NDP will undoubtedly seek a public inquiry if the case is thrown out. But Campbell has so far stonewalled on the case and the vanished e-mails. The tactic has worked and it’s unlikely that he would now accept an independent inquiry into the scandal.

Sunday, July 19, 2009

A dissident hero speaks for democracy

Not in China or Iran, but in Alberta, where a Conservative MLA has decided to put his constituents ahead of his party.
Party discipline is part of our system. Members of a party are supposed to share some broad principles and policies.
But they are not supposed to be robotic public boosters of their bosses reciting talking points written by staffers at the direction of the leader. They should not stand foolishly silent when government actions damage their own communities. (For example, like Liberal cabinet ministers Murray Coell and Ida Chong, when their government enriched a forest company while opening vast amounts of green space and protected land for development.)
Our system was based on MPs and MLAs having the power to dump a distant or inattentive leader; they have abandoned that power and chosen docility.
Except for this guy.