February 2, 2015

Referendum: Editorial – Hume on a Hijacking

Stephen Hume in the Vancouver Sun:

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Anti-tax group has hijacked debate

Pressure group: The Canadian Taxpayers Federation, based in Regina, has no legitimate say in transit plebiscite

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How is a non-democratic special interest group… able to develop such traction in framing the current Metro discussion of public transit funding?

How is a minuscule, Prairie-based, fundamentally non-democratic special interest group that operates like some self-appointed secret society able to develop such traction in framing the current Metro discussion of public transit funding?

Judging from the Canadian Taxpayers Federation, you’d think Metro residents were staggering under intolerable taxes and about to be crushed by yet another.

Yet competitiveness studies show that after Alberta we enjoy the second lowest provincial tax in Canada. Our sales tax is lower than all but two provinces — and would retain that rank even with the proposed transit increase. Corporate tax rates here are second lowest in Canada. Small corporations enjoy a tax rate 20 per cent lower than Alberta’s. Residential taxes in Metro are lower than in Victoria. …

Yet here is the CTF, this tiny, unaccountable, unidentifiable pressure group, spouting demands for transparency in the coming plebiscite and choosing language that suggests a lack of legitimacy in the process all while implying some onerous tax decision.

Well, it’s not an election. It’s not a referendum. It’s a plebiscite. And it’s not a vote authorizing a tax, because the results aren’t binding. In fact, you’re only voting because your cowardly provincial government seeks to evade difficult decisions which arise when its narrow ideology founders on the reefs of reality. So, it’s simply a memorandum of advice to elected officials about what voters in specific municipalities think about a proposed regional policy for funding transit infrastructure that if left as is will be inadequate to service rapid population growth in a critical economic zone.

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PT: Oh, it’s not a plebiscite – in the sense that it’s only advisory.  What provincial government, in a post-HST environment, would ever suggest that this vote should not be effectively binding?  How could any new tax mechanisms be considered to fund transit (except, of course, property tax, if decided by the local councils)?

In that sense the vote is historic: a No vote would be a message not only to our local political class and the broad leadership coalition that has assembled to support a Yes vote, but a message to governments across Canada.  No More Taxes!  Even Vancouver turned down transit!  

A rejection of the Mayors’ Council proposal would likely be seen to so discredit the leadership of this region that a void would be left to be filled by, yes, the CTF and whatever other anti-tax, anti-government groups would assemble to take the credit.  And they wouldn’t stop at TransLink and transit.  The goal is, after all, to so limit government that its traditional roles (particularly of the provision of collective services and the transfer of wealth through taxation) would be eviscerated.

For a precedent, see the impact of Tim Eyman in Washington State.  It’s another step on the Americanization of Canadian politics.  And possibly of Canada itself – at least as far as the mythology that has distinguished us from the U.S. 

Here, for instance, is that perspective found today in Reflecting Vancouver, where an American émigré blogged about his Canadian citizenship ceremony:

The judge bears confidence, candour, and splendid golden hair. She asks us to be seated, welcoming us from the central podium. She begins speaking to us directly…

“I hear many people say they love the benefits of Canada. It is so beautiful here, they say. The free education, the free health care. Make no mistake — these are not free. If you believe they are free, they will not be there for those who come after you. They were built through hard work, dedication, and compromise. You must do your part to maintain them for future generations.”  …

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Comments

  1. I have often wondering who was funding this group as their rhetoric and “comment” is often unsubstantiated and off base. But this group will not disclose who they are and where they get their funding from? But they want transparency from everyone else? And expect to be listened to?

  2. It is fairly well-known that Mr. Bateman is an acolyte of the right-wing think tank Fraser Institute, whose ideology is similar to that described by Mr. Price (above). I ask the simple question: “who benefits if Mr. Bateman succeeds in defeating transit?” One answer, for me at least, is big oil and car dealers. If YES is successful, and we provide significant growth in transit, then big oil loses some of their local market for gasoline, and car dealers lose some of their market for new cars.

    1. Those are big “if”s, Ken, and not mutually inclusive. Further, there is no guarantee of a decline in local markets for gasoline or cars as a result of a YES vote. Indeed, without the specifics of where, when, how, why and if transit changes will be made after a YES vote, a NO vote is the best option to prevent more misuse of funding until accountability is provided prior to expenditures on transit. Let’s not throw more good money after bad.

      1. There is plenty of information on what will be done including cost estimates here: http://www.bccc.bc.ca/yes#info

        The statement about waste is just Canadian Taxpayers Federation nonsense. TransLink is not perfect but they are far better than the Provincial government. For example, the Port Mann Bridge, which Jordan Bateman lobbied for is losing $120 million per year. The “waste” that Bateman and CTF is focusing on only amounts to around $2 million a year.

        1. Hi Richard,

          I am not interested in the musings of Bateman or the CTF; the fact is that the losses are the result of mismanagement and poor decision-making. I want assurances that these failures will not be repeated before I authorize any further spending on transit or transportation infrastructure. We taxpayers have too much to lose without full accountability prior to expenditures.

          1. TransLink has been audited several times and improvements have been made. There is far more oversight than there is with the Provincial government. Bateman and the CTF have done a great job of making people fall for their talking points and spin.

            Unfortunately, it will be the people of the region that will be punished if CTF succeeds with their nonsense.

            1. Yes Richard,

              Unfortunately, spin always occurs on both sides of the table, and the general public are always at risk of paying the price.

  3. One of the founders of the CTF & CEO was Jason Kenney, now Minister of Employement.
    There is a 6-member volunteer board. It would be interesting to track how many were or went on to be involved with the Reform Party/CPC.

    Supporters do not get to elect this board, they elect themselves. Here is the CTF’s [minimalist] Financial Statement for 2012: https://www.taxpayer.com/media/CTF2012-Disclosure2.pdf

    It’s likely J. Bateman is one of the employees earning between $71-90k/yr.

    1. The CTF is being cagey with this press release. It is called “Financial Highlights” and is “based on final audit figures”. It is not an audited financial statement.

      And some of the numbers provided don’t seem to add up. The CTF claims 8 employees make $71,000 or more per year. Eight times $71,000 = $568,000; add another $20,000 for the person making more than $91,000 and the CTF has a minimum salary cost of $588,000 which far exceeds the total administration costs of $370,591 (assuming salaries are an administration cost). Which line items in the ‘Financial Highlights’ cover the CTF’s salaries?

      1. Correction: That should be 6 employees earning $71,000 or more per year. This changes the minimum salary cost calculation to $426,000, still in excess of the total administration costs of $370,591.

  4. Yes, investment in public transit is relevant in MetroVan. The Canadian Tax federation is not against such investments, it is, like me, against the form of taxation. it has, to my knowledge, not shown a Plan B. Here is mine:

    Arguing for the proposed sales tax increase of 0.5% to fund additional transportation options in MetroVan by stating “Plan B does not exist.” is utterly incorrect. Plan B does exist: lower expenses (especially overpaid civil servants and outsource more), raise property taxes (especially for non-residents), raise land transfer taxes (especially for non-residents) and raise parking fees / resident parking permit fees.

    Immigration to MetroVancouver is costing existing home owners dearly in terms of congestion, education and healthcare. Many immigrants do not work here and do not pay any, or not nearly enough, income taxes. Property taxes are too low to pay for all this required healthcare, education or transportation services. As such, raise property taxes 10%/year for 10 years and land transfer taxes by 1% per $1M to 15% for over $15M residences immediately, and rebate the majority of the increase to local income tax paying residents on their annual income tax return. Immigration and buying property in Vancouver by non-residents or new immigrants is far too cheap and needs to be monetized far more for locals’ benefits.

    ==> We have a homeless, education, healthcare & congestion problem because the houses and condos in Point Grey, W-Van, UEL, Burnaby or Richmond aren’t taxed enough, especially those owned by non-residents or non-income tax payers such as wealthy immigrants! [Disclosure: I am an immigrant, too]

    Also, if we wish less car use we have to make it more expensive. Both states: driving and parking. I acknowledge the fact that MetroVan mayors wish to toll driving and I 100% agree with that. But they can’t do it without the province’ approval. However they can tax the other state of car use: parking. Parking fees incl. resident parking permits across MetroVan ought to be increased sharply. Often it is entirely free to park your car on a road you do not own. Why is that? Perhaps any single family house comes with one free parking permit on the road, then the next is $100/month, and the next $250/month. $125/year for a residential parking permit? Really ? This is sustainability and “green” ? Even $125/month is too low in jurisdictions where a 50 x 120 lot is $2M. Land is valuable and has to be monetized for its owner, the Cities of MetroVan. Make car use more expensive by charging more for parking. A lot more. This is within the control of the MetroVan cities’ councils.

    Finally, every service provided by the cities need to be optimized and many functions outsourced to save 20-50%. Public sector unions have sucked the city coffers dry with their excessive wage and benefits for so long that not enough money is left over for investments such as necessary transit improvements. Far too many jobs are done by unionized city workers that can and should be done cheaper and better with private contractors. The UNA (The UBC residents municipal like council) actually shows great leadership here with their landscaping services or even their own admin staff. If those were Burnaby or Richmond those costs would be 30-50% higher. Much room for savings across the bloated MetroVan provided in-house services. A major salary and benefit review is in order.

    I conclude: No sales tax increase is necessary until Plan B is fully implemented. Much room there: $40M to $60M in civil servants salary and benefits savings across MetroVan would allow $2B to $3B borrowed at 2% interest rate. Plus another $100-120M a year in raised property taxes, parking permits, parking fees and land transfer taxes. With that the required $4-6B could be borrowed and the 1.5-2%/year interest paid for (and the rest is federal and provincial grants) !

    MetroVan mayors, including our charming Electoral Area A rep, unfortunately have passed the buck and chosen the easy way out and not shown the necessary backbone to make the tough choices. Look into your own tool kit first !

    1. Thomas, your plan B does sound interesting; however, it does require significantly more data and fleshing out before it can be considered an option (perhaps try using some data from statscan…).

      Contrary to your arguments, the conventional thinking is immigrants provide jobs and improve our economy. I’m an immigrant, and my company employs directly and indirectly at least 60 people, not to mention that many of the companies we work with have been founded by hard working immigrants. I also own real estate, and pay substantial property tax and land transfer taxes, not to mention that all the properties I own, house 1st, 2nd, and 3rd generation Canadians. Blaming the immigrant game is not fair and terribly small minded – we are all immigrants here, even you.

      1. healthcare, education and transit is funded by provincial income taxes, PST, property taxes and land transfer taxes. My point was that wealthy immigrants with two or more passports – and non-residents parking offshore cash – do not pay enough income taxes as often their Canadian incomes are zero or low, yet they buy huge homes or condos. As such those homes or condos need to be taxed far far higher. Locals are unduly asked to pay for immigrants’ healthcare, education and road congestion. This analysis indeed need more data, but also far more awareness and discussion.

        As does public sector salaries/benefits and parking fees, frequently far too low.

        MetroVan have passed the buck without asking the tough questions or making the tough decisions.

  5. Reblogged this on GitanoAfricano and commented:
    Hopefully the yes side can come up with a compelling big picture message as to why no is not an option. In a competitive global economy, Vancouver has to make investments in its transit infrastructure to keep up with other cities. The fall in the Canadian dollar is a stark reminder of how quickly capital takes flight to other parts of the world where things are being done better and more efficiently. This flight makes us only poorer against our peers.

      1. There is the argument that taxes chase away investment, and as a business owner I certainly agree; however, the issue is not as black and white as tax pundits claim. Infrastructure must be upgraded and expanded, if not cities will go into decline – think Detroit, but also consider ancient Rome. Taxation is required to build infrastructure – the truth is we can’t build roads and trains ourselves, we need the economy of scale of government to due it, hence why we pay taxes. Businesses in San Francisco and Boston, both alpha cities, have resorted to hiring their own buses to get employees around because the public transit is a disaster from a lack of funding. This is what we face in Vancouver if we don’t collectively fund transit.

  6. There’s nothing surprising to most of us. Hume is over-reacting. In BC taxes are often a powerful issue. Look at what happened with the experts and the HST. Bill Tieleman and ex-premier Bill Vander Zalm teamed up and actually won an unprecedented referendum. Having Tieleman out there leading the charge For this tax increase is an obvious irony that begs comment. Sales taxes are also liable to cause a reaction because our neighbouring province has none. Both sides in this battle are incensed over taxes. The right leaning are for all those reasons we need not reiterate, like general government waste, largely unaccountable public bodies and debatable collective agreements with municipal workers that have leapfrogged the private sector. The left is incensed because of all the fees that have crept in, like MSP premiums and even BC Ferries fares. Gregor Robertson being the lead in this, after being at a news conference during the his election campaign, with David Cadman, the ex-COPE, now President of the international ICLEI organization that works hard for just about exactly the carte-blanche open-ended well-financed transit, cycle and densification of cities schtick, was bound to raise some eyebrows.

    All of the Yes team are mimicking Gregor Robertson and the closing days of his campaign, when he apologized for not listening to ‘the citizens’, and pleaded for another chance. They all apologize for TransLinks’ shortcomings, just like a public defender pleads for a serial offender to be given another chance. It’s embarrassing. (Image the TranLink coffee chat. “Everyone on our side says we’re constantly screwing up but they all love us and want to give us billions more!”.)

    As usual in BC, it’s becoming another compelling skirmish. The volume will probably become louder and the silly comments more silly. “More obesity! if it’s NO”, “More dementia if it’s NO”, “More car deaths if it’s NO”, “Certain armageddon, if it’s NO”.

    No it won’t. But it will be fun if one enjoys politics.