I was calculating the other day that I’d been in about two dozen so-called “lockups” for media before a provincial or federal budget was released.
It’s a privileged perch: over the course of a few hours – in exchange for our freedom, our smartphones and Wi-Fi – media get the batch of budget documents, access to the finance minister and officials, food and drink to keep us alive, and barely enough time to prepare stories about the measures, to be released as the minister rises in her or his place to speak about them.
What I’ve learned is that the first press of the Send button on our stories is rarely spot-on. We aren’t dumb – at least, I don’t think so – but we find out big things in the hours to come. This provincial budget was no different.
To wit: most everyone focused on the three-year investment in child care and the 30-point housing plan. As high-profile public concerns, measures to address them legitimately garner attention. Still, it left an opening for something away from the fray that banked on the budget’s spoonful of sugar to bury the medicine.
This time, the sleeper was hiding in plain sight: a payroll tax (the NDP calls it an employer health tax) that businesses identified more readily than did media because their horse sense apprehended the approaching thunderstorm.
The news could first be found on lucky page 13 of the government’s Three Year Fiscal Plan. Its revenue is expected to be $463 million in the fiscal year ending next March, three months after its January 1 introduction, and $1.9 billion by 2020-21.
“The elimination of MSP [Medical Services Plan] premiums will be funded by the revenues from the new employer health tax,” the document said.
Which is not a lie, but not quite the whole truth. The government will collect this money for a full calendar year in 2019 before cutting the remaining half of the MSP premiums in 2020. It will have a one-year bounty of more than $1 billion to spend as it pleases before it plugs the MSP gap.
When you get to page 74, details emerge: no tax on the relatively few businesses with payrolls of less than $500,000, a 0.98% tax on those of $500,000 to $750,000, a 1.46% tax on those up to $1 million, 1.76% on those up to $1.25 million and 1.95% on everyone – and there are many everyones – above that.
When you add it to the one-point corporate income tax boost introduced last year, an increased carbon tax and legislated minimum-wage increases, it’s pretty clear that business will bankroll new NDP political priorities.
Now, to be fair, the Liberal government was intent on eliminating the MSP premiums, too, and by now if it were still in power we would likely be grousing about how it would make up for the lost revenue.
But while the investment in social programs was well received, the BC NDP has left the province vulnerable on several points as it sets an agenda.
It was disconcerting that so little attention in the budget was paid to threats and uncertainties.
Donald Trump’s new tax plan has taken away much of any B.C. business competitive advantage. Our trading relation with America is bound to be altered, either by an economic slowdown there or unfavourable changes to the North American Free Trade Agreement. Not a word in the budget.
Domestically, there are relatively few funds to battle forest fires, so a reprise of last summer’s incendiary crisis will tap limited contingency funds.
The Insurance Corp. of British Columbia could be more of a hemorrhage than anticipated. Launching legalized cannabis might be more costly. Transit infrastructure expenses are bound to grow, particularly if there is no mobility pricing until at least next year. And imminent negotiations with the public service loom large. Sorry, little if any budget wiggle room.
So, while the shiny objects of housing and child care hog the limelight, the more you spend time digging into the documents, the more it is clear there are troubles offstage we could easily see in Act 2.
Not just sleepers, but sleeping giants. •
Kirk LaPointe is editor-in-chief of Business in Vancouver Media Group and vice-president of Glacier Media.
