VICTORIA: The Canadian Taxpayers Federation (CTF) reacted to BC Budget 2003/04.

"The province's latest financial figures sizzle but BC taxpayers are having a tough time affording the payments," said Victor Vrsnik, BC Director for the Canadian Taxpayers Federation. "Gas tax, property tax and fee increases are eroding taxpayer's ability to pay."

Vrsnik noted that the BC Liberal's original $2.133 billion tax cut is losing value faster than the Canadian exchange on the US dollar. "Once the tax hikes are deducted from the original $2.133 billion tax cut, only 50% or a $1.08 million tax cut is left to British Columbians."

The CTF opposes any new school property tax increases, particularly when the tax is indexed to inflation. "The $62 million school property tax hike is the latest indignity to BC homeowners who already pay high real estate prices," said Vrsnik. "But let's not throw the baby out with the bath water. British Columbia taxpayers today still have $1 billion more in their pockets than two years ago. It's an improvement to BC tax competitiveness vis-à-vis the rest of the country, but insufficient to over-take Alberta, where more and more British Columbians are increasingly calling home," said Vrsnik.

BC losing Competitive Tax Race with Alberta
The CTF calls on the BC government to renew its vows on tax competitiveness to close the tax gap with Alberta. "Further brain drain to Alberta is expected as BC continues to lag behind Alberta in most tax categories," said Vrsnik. "With the end of the deficit in sight, the government should indicate when British Columbians can expect to see the latest tax hikes reversed and other taxes driven back. What are the government's long-term commitments to tax relief "

Deficit and Debt
The CTF gives thumbs up for better-than-expected deficit and debt reduction targets but cautions the government not to rest on its laurels. Deficit servicing costs that amount to $1.75 billion for 2003/04 would be better spent on British Columbians through tax relief.

"The BC government should act without delay to eliminate this year's estimated $1.8 billion deficit and thereafter legislate a debt reduction schedule. By the time BC erases its deficit in 2004/05, Alberta will have celebrated its 10th year anniversary as a deficit-free province," said Vrsnik.

Spending Restraint
The Finance Minister should accelerate spending restraint particularly in terms of public sector costs. Rising public sector costs in the 1990s paved the way for recent tax hikes and chronic BC deficits.

"Between 1997 and 2000, 31,666 more people left BC than moved into the province. It's either a strange turn of events for Canada's most livable province or proof positive that high public spending has done more harm than good," noted Vrsnik.

The CTF applauds ministries for hitting their 2002/03 spending targets. "All ministries coming in under budget is a precedent-setting achievement for the cabinet ministers and their employees," congratulated Vrsnik.