BC would have smaller deficits without tax and spending cuts, says CCPA

February 4, 2003

(Vancouver) The Canadian Centre for Policy Alternatives says the provincial government could spare British Columbians the pain of spending cuts, while still meeting the government’s three-year timetable for balancing the budget. In its 2003BC Solutions Budget, the CCPA shows what would have happened to provincial finances had there been no tax cuts and no spending cuts.

The Centre models an alternative scenario: no personal or corporate tax cuts; no regressive tax increases (like the 50% hike in MSP premiums); no spending cuts; and spending increases in health and education that maintain 2001/02 service and employment levels. In this scenario, called “the path not taken,” provincial finances are significantly healthier than current government projections, with smaller deficits from 2001/02 to 2003/04 and a small surplus in 2004/05.

CCPA-BC Director Seth Klein hopes the government will re-think its choices. “The tax cuts were supposed to stimulate so much bang-for-the-buck that they would pay for themselves. But in spite of the tax cuts, BC went into recession in 2001, and we experienced slow growth in 2002, trailing the rest of the country. The government’s economic strategy is more a leap of faith than a compelling economic plan.”

“The Solutions Budget shows that we can afford a more compassionate approach. BC needs a creative, long-term economic strategy that addresses the growing gap between rural BC and the Lower Mainland, diversifies the provincial economy, and spares British Columbians the needless pain of deep spending cuts.”

The Solutions Budget also takes a detailed look at the causes of BC’s two decade-long economic slowdown and offers options for a made-in-BC economic development strategy that is sustainable and equitable.

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