Indignation over taxes is costing B.C. kids
The Province
October 29, 2010
By Dr. Paul Kershaw

… In my view, that question is the sub-plot. The main story is that British Columbians got from the premier the social policy we deserve -- very little.

For months and months, the vast majority of us have said no to the HST. While some oppose the HST on principle because of the way it was announced, my read of the public mood is that most simply think we are over-taxed. ….

With wishful thinking, the premier then implied his tax cuts can help the middle-income in B.C. fend off the vulnerability of their children.

If only wishes were true.

The fact is we've seen the same tax-cut strategy in action for a decade, and it has failed families with kids.

By his own account, the premier cut income taxes 25 per cent in his first days in office. Since then, we have witnessed child vulnerability in the province increase by 12 per cent -- to the point where nearly a third of children in 2010 are vulnerable as they enter kindergarten.

Some may claim the initial tax cuts grew a stronger economy before the recession. But those tax cuts certainly didn't grow a stronger, healthier, smarter population -- before or after the recession.

So, British Columbians, I plead with you. Consider carefully what was most important in the premier's address last night. Too many B.C. children are vulnerable before they reach school. Not only is this compromising their school success at Grade 4, as the premier pointed out, it is compromising their success in Grades 7 and 12. Because of this early vulnerability, B.C. research confirms that the share of kids graduating with grades good enough to go to university will be lower by a third, and the proportion of these kids who end up incarcerated will be higher by 31 per cent. By wasting all this human potential, research commissioned by the Business Council of B.C. also shows that the province will throw away 20 per cent from B.C.'s future economic growth.

Think very carefully about the $354 in announced tax savings for a parent making $50,000. Can it really turn the tide on early vulnerability? Taking parental leave for a year costs most British Columbians more than $10,000 a year in forgone disposable income. Early learning and childcare services cost nearly as much per year for a single child. Clearly, a few hundred extra dollars in tax relief doesn't make more affordable the additional time or services that middle-income families with young kids need.

By comparison, the $638 million per year that last night's income tax announcement will soon cost provincial coffers could have paid to extend parental leave in this province to 18 months, and make the benefits far more generous -- giving both dads and moms time and income to devote to newborns.

Alternatively, it could have paid to extend full-day kindergarten to all four-and three-year-olds in B.C.

So, British Columbians, it is time to recognize that our indignation about the HST is costing our kids, ….

When we debate the shift from the PST to the HST, we are debating a tax change that most agree is revenue neutral, although where and when we pay it is different. The HST costs $3.8 billion/year in B.C. This is minute in comparison to the early vulnerability debt. Allowing 30 per cent of kids to struggle as they reach school costs B.C. $401 billion.

It is time for British Columbians to do the math. Tax cuts cannot grow strong economies in perpetuity if we don't grow strong, smart and innovative populations. Put bluntly, strong economies require smart family policy.

Last night, our anti-tax sentiment successfully encouraged the premier to overlook this investment. If further reducing taxes really is a top priority for most British Columbians, so be it. But know full well that the cost is another generation of vulnerable children, and an economy to match.