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Another Political Hindenburg: Moe Sihota's Summer Project

Author: Mark Milke 1999/07/29
It is always more inspiring to positively critique political ideas than criticize them, but despite that preference, politicians routinely propose loopy ideas that must be reacted to, if for no other reason than to point out that the emperor has no clothes. Well intentioned or not, bad ideas must be punctured before they drag the citizenry along, hanging upside down from a potential Hindenburg of an idea.

Moe Sihota, minister responsible for the Orwelllian-named Social Development and Economic Security Ministry, proposes to begin another war on poverty. It will include "finding ways" to make businesses either ante up for daycare or increase their employees' wages to make such care more affordable. "Affordable" that is, for the individual, but not necessarily for the business that employs them.

When BC's government embarks on "finding ways" to force businesses to "do something," you just know it's going to involve new regulations, a new law, or another tax by a different name - all of which kill jobs - which of course throws people into poverty. But never mind, the current government in Victoria thinks it can create prosperity, jobs, banish poverty and end all ills, by either fiat or photo-op, and no amount of evidence to the contrary interrupts their illusion.

Another quiver in Mr. Sihota's arsenal is his plan to provide pensions for the poor. Sounds noble. Too bad Mr. Sihota's government steals pensions from retired union members if they go back to work for a non-union firm. So much for their economic security.

Besides that little problem of hypocrisy, the Canada Pension Plan and Old Age Security exist precisely to do what Mr. Sihota proposes, and they already cost taxpayers plenty. Contribution rates for the Canada Pension Plan have already jumped from 5.6% in just 1996 to 7.0% now, and are headed towards 9.9% in 2003.

Someone earning $39,000 in 1996 paid just under $900 in CPP taxes compared to a projected $1,700 in 2003, and that's a low estimate, since the federal government keeps expanding the amount of income subject to CPP tax rates.

If Mr. Sihota does not think that a projected 89% increase in CPP taxes over seven years is enough for taxpayers to pay into a public retirement fund, perhaps he could aim to replace Paul Martin. And then he would be free to raise rates even further.

Mr. Sihota also wants more social housing courtesy of taxpayers. How ironic. There exists a growing abundance of rental units in BC thanks in part to an exodus of economic refugees to Alberta, and Mr. Sihota proposes to build rental units that will compete with private apartments.

Thus, landlords who pay taxes will see such dollars used to compete with them in a depressed rental market. It would be economically smarter and probably safer for taxpayers if the rent payments of the poor, where necessary, were instead topped up.

But no, Mr. Sihota will use taxpayer dollars to create what will one day resemble the worst 1960s-era American inner city tenements built by Lyndon Johnson, an ugly testament to that "war on poverty," which left more Americans in poverty after it finished than when it began. Mr. Sihota's battles are likely to produce a similar outcome.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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