Whoever becomes the next leader of the province after Saturday night will inherit B.C.’s glaring deficit, which is projected at nearly $14 billion. So, between the BC Conservatives and the BC NDP’s costed platforms, which party is the strongest candidate to bring down the deficit?
Both parties are offering fiscal projections that may be more wishful thinking than reality, according to one expert.
UBC Sauder School of Business associate professor Tom Davidoff calls both parties’ costed platforms a “lose-lose situation.”
“This has not been pretty to watch,” Davidoff said.
“Essentially, it is a competition between, cross your fingers and hope you’re not on the wrong side of the Laffer curve.”
The BC NDP projects it will reduce the deficit by $2 billion in two years. Their platform says they’ll raise taxes on higher-income earners while relying on additional revenue from economic growth and approved resource projects like LNG Phase 2. The governing NDP also promised to put a price cap on groceries to increase competition in that sector — something Davidoff calls “very troubling.”
“The big concern is what you see in Eastern Europe. You tell people, ‘Hey, I know tomatoes cost you $1.50, but you have to charge a $1 per tomato,’” he said.
“Then nobody’s going to sell tomatoes, and that is a big problem.”
Davidoff also says the NDP’s proposed increase to the speculation and vacancy tax on empty homes and condos could send the wrong message to potential developers.
“That’s telling investors in real estate that if things go badly, we’re going to kick you when you’re down, so be prepared that if you’re going to invest in B.C. real estate, if things go badly, we’re not going to be sympathetic,” he said.
According to Davidoff, the alternative is no better. He says the BC Conservatives’ platform, which was released less than a week before the final voting day, is far from fiscal reality.
“The BC Conservatives’ approach to our deficit, is that the ‘growth fairy’ is going to take care of everything.”
He challenged the party’s promised $1,000 tax cut for most workers, saying it’s “like giving out free money.” He also called their platform vague and says their revenue projections are baseless speculation.
“The answer has to be higher tax rates somewhere, or reduced expenditures, but the costed budget says the growth fairy is going to take care of it, so we don’t need to make any cuts to anything, we’re going to vaguely de-regulate, cut red tape, which is like fourth-grade-class president level of sophistication.”
No matter what side of the political spectrum the province finds itself on after the election, it’s going to be a long road before B.C.’s deficit works its way back to a surplus.
source & photo: CityNews
