Irene Lanzinger | Address training, tax reforms, poverty
New year, clean slate: that’s the approach that unions across the province will advance as they work to build a better B.C. over the next 12 months. It’s an approach that deserves support as B.C. tackles the major economic and social issues in our province.
It’s also an approach that is gaining support within parts of government – and hopefully within the ranks of more employers – as policy leaders recognize that the labour movement’s persistence on key issues has greater resonance. Trades training and apprenticeship reforms are an obvious example of that persistence. When the Gordon Campbell government moved, more than a decade ago, to radically reform the system of trades training in B.C., the labour movement said the so-called new model was deeply flawed and wouldn’t deliver the much-touted benefits. Fast-forward 10 years and several critical internal reviews of the Industry Training Authority (ITA), the agency at the centre of the new model, and it is clear that the radical reforms have not worked. Apprenticeship completion rates have been woefully inadequate and are stressing an already critical shortage of skills in many trades. Ignoring the input of unions – a hallmark of the ITA’s initial approach more than a decade ago – has proven to be a mistake. The fact that the B.C. government is now prepared to recognize that problem and engage the labour movement in current reforms is a good first step and one that needs to gather speed over the next 12 months.
The rethinking that the B.C. government was prepared to do on trades training and apprenticeships needs to be carried over to other aspects of government. At the broadest fiscal level, for example, it’s time for the provincial government to reconsider its current obsession with austerity. Starving ministries of needed increases in their operating budgets severely undermines the capacity of government to fulfil the critical oversight functions that every citizen expects the government to meet.
The obvious starting place for a new fiscal strategy will be the 2015 provincial budget. It provides a forum not only to articulate how the proper funding of critical public services like health care and education – both of which have suffered from 15 years of chronic underfunding – help contribute to B.C.’s prosperity, but also to begin a conversation with citizens about how we fund the services we need. Tax cuts have not “paid for themselves” as was chanted repeatedly when they were first advanced in July 2001. A similar brand of fiction is also at play when governments talk of illusive tax revenue windfalls that are so ill-defined and so distant from the present they blur the lines between the real and the imaginary. Meaningful tax measures are needed in B.C. It’s a tough but much-needed conversation. B.C. needs tax reforms based on progressive principles and a thoughtful recognition that properly funded public services are critical to the success of a modern economy.
The 2015 provincial budget also needs to address another critical issue: poverty. B.C.’s poorest families deserve a wage increase, and the best way to ensure they get it is through an increase in the minimum wage. Working poor is not working. It guarantees only greater inequality and, worst of all, persistently high rates of child poverty. Canada committed to ending child poverty more than 20 years ago, but the commitment has been ignored at both the federal and provincial levels.
It’s long overdue that B.C. takes the leadership steps necessary to relegate child poverty in our province – and in Canada for that matter – to the history books: 2015 should mark the turning point in that fight.
Twelve months from now, let’s not look back at 2015 and list the things we should have done to build a better B.C. It’s a new year. Let’s make the best of it. •
Irene Lanzinger ([email protected]) is president of the BC Federation of Labour.
Niels Veldhuis | Improve B.C.’s investment climate
With the rapid oil price decline significantly affecting Alberta, Saskatchewan and Newfoundland, private-sector forecasters are predicting that B.C. will be among Canada’s fastest-growing economies. This, however, provides little reason to cheer. With an expected economic growth rate of 2.5%, B.C. will in all likelihood be leading a group of economic turtles. Given this bleak outlook, the B.C. government’s singular focus should be on improving the province’s economic environment and investment climate.
Here are the top priorities:
1. Mitigate the uncertainties created by the 2014 Supreme Court of Canada Tsilhqot’in decision.
The Tsilhqot’in represents the first time in Canadian history that aboriginal title has been granted outside an Indian reserve and can extend to all traditional territories. This is particularly important in B.C., where outstanding land claims cover more than 100% of the province’s land (due to overlapping land claims).
Even more important, the judgment states that once aboriginal title has been recognized, project development requires the consent of the First Nation that holds title, except where the government can demonstrate a compelling and substantial public purpose for the project. In addition, decisions will be retroactive.
This puts all current development in B.C.’s natural resource sector at risk and creates uncertainty around any future project development.
2. Put forth a plan to make B.C.’s taxes the most competitive in Canada.
Two years ago the B.C. government “temporarily” increased both personal and corporate income taxes to help eliminate the deficit. However, despite balancing the budget, these “temporary” measures have not been removed. Removing the corporate and personal income tax hikes will improve B.C. tax competitiveness and encourage investment, business development, work effort and entrepreneurship.
The province also needs to offset the marked increase in business taxes associated with the reintroduction of the PST. Indeed, the government’s own Expert Panel on Business Taxation recommended that the government introduce a refundable investment tax credit equal to the PST paid on machinery and equipment. Without a competitive tax system, B.C. risks losing much-needed investment and skilled workers that will instead gravitate to jurisdictions with more competitive tax policies.
3. Reform B.C. labour laws.
B.C. is particularly uncompetitive relative to other provinces and U.S. states with respect to the regulation of unionized firms. Only Quebec and Manitoba have more biased labour laws. One particularly damaging regulation is that B.C. does not permit firms to hire temporary replacement workers to continue at least partial operations in the event of a strike. Banning replacement workers effectively increases the bargaining power of unions that already enjoy labour laws tilted in their favour.
Evidence also shows that, in addition to increasing the length and costs of strikes, banning replacement workers adversely affects employment and investment.
B.C. would also do well to consider adopting worker choice laws, which allow workers to choose whether they want to join and financially support a union. Currently, workers can be forced to become union members and contribute union dues as a condition of employment.
A recent study, U.S. Worker Choice Laws and Implications for British Columbia and Ontario, finds that worker choice laws increase economic growth by about 1.8% and employment by about 1% in the states that have such policies.
While B.C.’s economy may temporarily be the best among a group of slow-growing provincial economies, the way toward a truly robust economy is to focus on making the economic environment and investment climate the most attractive in the country. •
Niels Veldhuis ([email protected]) is president of the Fraser Institute.
