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Bill 28: Two Popcorn Kernels Out Of Six

Author: Mark Milke 2000/06/28
VICTORIA: Canada's leading proponent of balanced budget laws and taxpayer protection legislation, the Canadian Taxpayers Federation, today congratulated Premier Ujjal Dosanjh for introducing balanced budget legislation but expressed disappointment that the legislation did not go further.

"If this was a movie review, the bill would get two popcorn kernels out of six," said CTF-BC director Mark Milke. "Truth in accounting, already introduced in Bill 2, and the 20% dock in the cabinet portion of the minister's pay are both positive."

Milke noted there were several important omissions that severely weaken the bill.

  • A schedule for debt elimination. The Bill only has a schedule for bringing down the deficit.
  • Limits on new/higher taxes and spending. Taxpayer protection is completely absent.
  • High threshold for amendment or repeal, preferably by voters. This bill, similar to a 1991 Social Credit Taxpayer Protection Act, which contained balanced budget targets, could easily be killed by a future government. A super-majority in the Legislature, or preferably, voter approval for repeal, should be in this bill.
  • Legislation that covers all government entities. Bill 28 could allow for deficits to be financed through new Crown corporations. It appears overall Total Debt could still rise while Taxpayer Debt stabilizes, and this government has a history of transferring debt off of the main books.

    "Contrary to the government's assertion, Bill 28 - while a start - is not the best in the country," said Milke. "The bill is void in a year where revenues drop by more than $500 million. That's a 2.3% drop. Ontario's law requires revenues to drop by at least 5% before the balanced budget law there is invalid."

    Milke noted that because the legislation only becomes effective in 2004, the government forecasts $3.3 billion in new debt. That equals $232 million a year in additional interest payments in 2004 - not including debt run up outside of the provisions of Bill 28. "Language on exceptions - an 'emergency' or 'unexpected circumstances' - should be clearly defined."

    The Federation also noted that the 20% penalty applies only to the cabinet stipend of Minister's salaries - not their entire salary: $7,800 (20% of $39,000) vs $21,780 (20% of $108,900). Similar Ontario and Manitoba laws apply to entire salaries.

    "Taxpayers should look for consequential amendments. Otherwise, this is only a lukewarm attempt."

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    Franco Terrazzano
    Federal Director at
    Canadian Taxpayers
    Federation

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