politics: Report suggests B.C. headed for greater inequality under Liberals
Taigita Biln, The Peak

British Columbia is headed toward a 'new era' of rising inequality under provincial Liberal leadership, says a report released last week by the Canadian Centre for Policy Alternatives. The results of the report, called Behind the Headlines, challenge commonly-held beliefs regarding government spending and social programs. The findings suggest that, contrary to what the government would like us to believe, B.C. has not been fiscally unsound, tax-happy, and high spending.

The report suggests that it is possible for the province to have a healthy economy while maintaining social spending, and warns that inequality will rise if our government continues to pursue its market-oriented policies.

Marc Lee, the report's co-author and an economist with the CCPA, points out that "it is easy to make simplistic generalisations such as B.C. has the highest taxes and the highest social spending but the statistics don't support these assumptions."

The report reviews five areas: fiscal situation, taxation, public health care, public education, and equality and economic justice. The authors used standard statistical indicators to compare B.C. to other provinces in order to determine its strengths and weaknesses.

Before the recent tax cuts, Alberta was the only province that has had consistently lower taxes than B.C. The report also indicates that B.C. was economically competitive throughout the '90s and finds no evidence that tax cuts will boost the provincial economy.

Lee points out that there is "no systematic relationship between tax levels and productivity. What makes the difference is the way the government spends the money."

The Liberals have promised that there will be no cuts to health care and education, however, Behind the Headlines warns that simply maintaining current levels of funding is tantamount to a cut because spending will not keep up with growth in population or inflation.

"Current levels of funding for health care and education suggest no cause for complacency," says co-author Andrea Long of the social planning and research council of B.C. "Given the needs in our society, there is still much work that needs to be done."

According to the report, B.C. has greater economic equality than other provinces. However, this is attributed to rising inequity in other provinces rather than improvements in this province.

For example, large tax cuts and deregulation of the labour market in Alberta has increased inequality in that province, and the report's authors note that socially democratic governments tend to achieve greater levels of equality than market-oriented ones.

Welfare polices are also singled out in this report, and it claims that people who rely on welfare have been singled out for attack by the present government. "There is an ideological distinction between the working, or deserving, poor and those on welfare, the undeserving," says Lee, who contends that the way that the welfare system is set up now essentially traps people, making it harder for them to get back on their feet.

The authors of Behind the Headlines compiled the report because of the Liberal government's radical alteration of provincial economic policy. They thought it important to take a "snapshot" of the real economic situation in B.C. to be used as a benchmark for comparisons further down the road.

For more information or to view the report in its entirety, go to

http://www.policyalternatives.ca.

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