Report warns against "new era" of rising inequality

October 29, 2001

(Vancouver) Inequality increased in most provinces during the 1990s, but BC held its ground, according to a new report, Behind the Headlines 2001, from the Canadian Centre for Policy Alternatives. This will change, however, if the new government pursues the same market-oriented policies that led to rising inequality elsewhere.

"A combination of big tax cuts and deep spending cuts is a recipe for growing inequality in BC," said Marc Lee, the report's co-author and an economist with the CCPA. "Through income transfers and social programs, the provincial government plays a major role in offsetting the inequalities of market income."

Surprisingly, the report notes that BC's taxes were not high relative to other provinces before the Liberal tax cuts this summer. When total taxes were considered, only Alberta had consistently lower taxes. BC also continues to have a very healthy fiscal situation, a contrast to perceptions that BC "suffers" from high levels of debt.

The report also notes that BC does not have the most generous social programs in the country. In health care, BC's relative position has dropped as other provinces have re-injected funds after cutting back in the mid-1990s. In education, gains in BC by the previous government to expand post-secondary spaces and maintain a tuition freeze, are in jeopardy.

"Current levels of funding for health care and education suggest no cause for complacency," said co-author Andrea Long, of the Social Planning and Research Council of BC. "Given the needs in our society, there is still much work that needs to be done."

Behind the Headlines surveys data in five public policy areas--fiscal environment, tax system, health care, education, and equity and economic justice--comparing BC to other Canadian provinces. The report takes a snapshot of BC at the time of transition to a new government, and makes policy recommendations based on comparisons of BC to other provinces.