VICTORIA: The BC division of the Canadian Taxpayers Federation (CTF) responded to today's British Columbia budget by noting several important trends, including that total ministry spending will not decline nearly as much as earlier announced in November and January; that most staff reductions are back-loaded to the 2004-05 budget; and that today's tax hikes are similar in magnitude to those introduced by then Finance Minister Glen Clark in 1992 and 1993, though overall taxes are still down by $1.4 billion due to earlier tax cuts.

"In November, the government planned to cut ministry spending by 11-percent over three years. That changed to 8-percent in January. Now, the forecast is for less than a 5-percent reduction," said CTF-BC director Mark Milke. "To paraphrase Mark Twain, the death of government in British Columbia has been greatly exaggerated. Moreover, the new era of tax cuts in B.C. was dramatically short-lived."

Milke noted it would have been nice if the Finance minister could have at least assured British Columbians that tax reductions will take place in the future as economic conditions improved, to partly soften the blow of today's tax hikes. He also noted that there is no plan to review public sector salaries with an eye to private sector comparisons, which would give British Columbians an idea of how much they pay to public sector workers and which wage levels are legitimate and which are not.

The CTF noted that the $736 million increase in taxes today will claw back about one-third of previously announced $2.2 billion in tax reductions effective for this new budget year. The CTF also noted that TransLink has been given the authority to raise gas taxes in greater Vancouver by $43 million, and parking taxes by another $20 million if parking tax rates jump from 7% to 21%. In addition, because of federal rules, that 21% would become GST-taxable. As well, the tax increases may continue at the local level given the government's plans to give more taxing power to cities.

In terms of comparison, while taxes will decline overall this year, it is worth noting that the Social Credit government raised taxes by $246 million in their 1991 budget, the NDP raised taxes by $758 million in their 1992 budget, and again by $803 million in their 1993 budget.

"While today's tax increase may indeed be offset by earlier tax cuts, the parallel to the early 1990s tax hikes are worth noting," said Milke. "Raising the small business threshold for taxes is the one silver lining in today's budget."