Every year, the Standing Committee on Finance in British Columbia solicits feedback from any individual or organization in the province about what they would like to see in the next provincial budget. ARPA has participated in this consultation many times and this year was no different. Here are the three recommendations that we submitted to the next provincial budget.

Recommendation #1: Balance the budget over the next three-year budget and fiscal plan.

Budget 2023 forecasted operating deficits of $3.0-$4.2 billion for the next three fiscal years. When capital spending is included, the total provincial debt will increase by $13-$15 billion in the same period. The Parliamentary Budget Office (PBO) estimates that this level of spending is unsustainable, with a fiscal gap of 0.9% of GDP. And that was back in 2022 when the province raked in a surplus of approximately 2% of GDP. Combine that with the current deficit of approximately 1% of GDP and, in order to be fiscally sustainable in the long-term, the province needs to reduce public spending by approximately 4% of GDP, or $16 billion.

This is wise and prudent policy in a new high inflation, high-interest rate era. The provincial government, by going to an operational deficit and choosing now to make capital investments, is adding fuel to the inflation dumpster fire. Additionally, the provincial government needs to set an example to British Columbian families and businesses that getting its fiscal house in order is a top priority.

It’s not that all debt is bad. Borrowing to combat emergencies, to finance capital projects, or to make investments that will ensure future economic growth can be necessary. However, continually spending beyond the government’s means (especially through recent one-off affordability cheques or rebates that provide no long-term benefit) is poor fiscal policy.

Beyond that, such spending is immoral fiscal policy. The accumulation of debt puts governments in an increasingly precarious position and increases risk of a default, as exemplified by the disastrous Greek sovereign debt crisis. As one Christian proverb sagely puts it, “the borrower is the slave of the lender” (Proverbs 22:7). Rather than increase our dependence on federal transfers, domestic credit, and international credit, the province needs to balance its budget.

Recommendation #2: Simplify the provincial tax code.

According to the last budget, British Columbia has a total of 28 personal income tax credits that cost approximately $3.9 billion last year, in addition to a variety of corporate income tax, property tax, consumption tax, employer health tax, and insurance premium tax expenditures.

The current complexity of the BC tax code costs everyone money. The provincial government incurs tens of billions of dollars of tax expenditures every year. The federal government incurs the cost of hiring more staff members at the Canada Revenue Agency to process and audit these overly complicated returns. Individuals and businesses waste countless hours of time filing their own personal income taxes and applying for other benefits and incur financial costs by paying accountants to file income tax returns on their behalf.

Many of the boutique existing credits, benefits, and exemptions favour specific individuals, activities, and industries and have little rational basis. The only credits and benefits that should be retained in the provincial tax system are broad-based credits that have measurable positive outcomes and a compelling rationale that is not easily furthered by other policy tools. For example, generous charitable donation tax credits should be maintained as something that all individuals are eligible for and that further the work of organizations involved in poverty relief, education, religion, and other purposes that are beneficial to the community.

Niche taxes (e.g. the property transfer tax, speculation and vacancy tax, employer health tax, motor fuel tax, and insurance taxes) should be eliminated unless they too have measurable positive outcomes and a compelling rationale that is not easily furthered by other policy tools.

Consolidating the number of taxes, credits, benefits, and exemptions broadens the tax base, simplifies the process of paying and filing taxes, and limits the number of opportunities for tax avoidance and tax evasion.

Recommendation #3: Cease funding morally objectionable medical procedures and substances.

Abortion, euthanasia, sex-reassignment surgeries, elective vasectomies and hysterectomies, assisted human reproduction, and safe supply of hard drugs – if they are to be legal at all – should not be subsidized.

British Columbians are largely content with the province being the single payer of medically necessary services. However, there are a variety of health care procedures and products that touch on fundamental and deeply held moral, conscientious, or religious convictions that are not medically necessary. Human beings are made in the image of God and human lives should not be taken through either abortion or euthanasia. Our bodies are not ultimately our own to be shaped (much less mutilated) to fit our desired gender identities or reproductive capacity but are always to be nurtured and safeguarded from harm. Human reproduction is designed to occur as the natural result of sexual intercourse between spouses, not within a lab with the intention to fracture motherhood and fatherhood. Sobriety and self-control are virtues that are not only good and right but are imperative for an orderly and flourishing society; enabling intoxication and impairment through a safe supply of hard drugs is antithetical to this goal.

Governments have a duty to promote what is good and to punish and even prohibit what is bad. If there is disagreement about the morality of specific policy choices, governments should tread very carefully. At the very least, provincial governments should not force its citizens to pay for procedures that they find morally reprehensible. While the Bible says that all people must pay “taxes to whom taxes are owed” and “revenue to whom revenue is owed” (Romans 13:7), provincial governments ought to steward these funds appropriately and refrain from using these funds to further immoral or objectionable activities.

Final Report

Last week, the Standing Committee on Finance released its report. ARPA’s first recommendation was noted in the main text of the report: “The Committee heard several calls to balance the provincial budget and increase accountability. The Association for Reformed Political Action Canada stated that accumulation of debt puts governments in an increasingly precarious position and increases risk of a default.”

Unfortunately, most of the committee’s 166 recommendations suggested increasing funding to existing programs or creating new programs across a wide variety of ministries instead of consolidating the province’s service load. However, there were a couple of notable recommendations that touch on ARPA’s work.

One of the report’s recommendations (#88) touches on palliative care and suggests providing equitable, predictable, and stable funding to hospices and palliative care units and establishing a provincial database for palliative care metrics and reporting capabilities. These recommendations mirror some of the recommendations in our Palliative Care policy report.

Another recommendation (#113) suggests increasing the per student funding for provincial online schools, effectively reversing the cuts to online schools made in 2020. . ARPA criticized these funding cuts at the time. These online schools, such as Heritage Christian Online School and Regent Christian Online Academy, are often used by families who choose to homeschool their children

Recommendation #141 followed closely in the spirit of our restorative justice policy report, recommending that the province “provide increased, ongoing funding to community-based restorative justice organizations.”

Unfortunately, the committee also recommended (#142) that the province “increase funding for front-line organizations across BC that deliver peer-led and person-centred programming for individuals who engage in sex work and provide sustainable funding for the BC bad date and aggressor reporting system.” While there is nothing particularly objectionable about these programs, they do further normalize the legitimacy of prostitution in the province, something that runs counter to our policy report on prostitution.

Conclusion

While none of ARPA’s recommendations were adopted, participating in this consultation was still a very valuable exercise. With such a vast number of provincial programs and services and with a provincial budget approaching $80 billion, many spending decisions are not made at the very top of the food chain by the premier or the finance minister. Instead, many of the smaller spending decisions are made by lower-level bureaucrats in a variety of government departments or are influenced by this Standing Committee on Finance. While your local MLA might be able to influence some of these decisions if you spoke directly to them, participating in these public consultations are the best way to have your voice heard in budget matters.