Several events last week served as timely reminders that, sooner or later, there has to be a discussion about tax policy in this country and in the provinces.
One fiscal year ended, and another one began. And that meant a slew of various fee hikes kicked into action, from B.C. Hydro rate increases to B.C. Ferry fare hikes to a boost to ICBC rates. Throw in the earlier jump in medical service premiums and higher Employment Insurance levies, and you can see that being nickel and dimed in increasingly higher levels adds up to real dollars.
And I haven't even mentioned that proposed half point hike to the sales tax in Metro Vancouver to help pay for transit improvements, or steadily rising tuition fees in colleges and universities.
As for the other half of this argument - the service delivery side of government - it's worth noting social assistance rates haven't gone up much for years, and the education sector is increasingly looking desperate for more funding to prevent layoffs and other cuts.
And last week saw a protest rally against something that has been flying below the radar for a couple of years now: the federal government's unilateral decision to cut in half the annual increase it provides provinces when it came to health-care funding.
The federal Conservative government served notice several years ago it would not renew, or extend, the Canada Health Accord, a 10 year agreement that topped up existing health-care transfers from Ottawa to provinces by more than $40 billion.
Ottawa has been providing annual increases to provinces of about six per cent. Starting in two years, that will on average be cut in half and will essentially match a rise in economic impact.
Because health-care budgets are so massive, a cut of this proportion is staggering in size when it is translated to actual dollars.
In B.C., for example, the impact is expected to be close to $5 billion over 10 years, or a reduction of about a half billion dollars a year. To put that in perspective, this province's health-care budget is forecast to increase by roughly $500 million a year for the next few years, so the federal government's reduction will eventually equal the entire annual increase to the system.
If B.C. remains committed to injecting this kind of money into the health-care sector year in and year out, it means the provincial government must find that a whole bunch of "new" revenue every year (or cut programs and services).
The problem is, revenues are increasingly precious to government and new revenue streams are seized upon with glee - with the exception of straight tax increases.
Over the next three years, the B.C. government is projecting to collect an additional $2.8 billion in revenue. Almost half of that is expected to materialize from people earning more money, and spending more (and therefore contributing more in taxes).
The rest will come from steadily rising contributions from medical service premiums and other fees (although the government insists none of that is a form of taxation), a modest increase in corporate income taxes and social transfer funds from Ottawa.
And more half of that "new" revenue will go to one area of government services alone: the health-care system.
Add all of this up and the situation is this: the government is becoming increasingly cash-starved, the situation will become even worse with the reduction in health funding from Ottawa, and those "nickels and dimes" from various fee hikes will continue to add up every year.
In the meantime, there is no indication that much more will be done to help the most vulnerable in society as there's not much money left over after health and education take their share of any new revenue.
The B.C. Liberal government is sticking to its lofty promises that a liquefied natural gas industry will eventually get off the ground and deliver potentially billions of dollars to the provincial treasury.
But if those LNG dreams - and that's all they are right now - don't materialize, the government is going to have to face up to a fiscal reality that will mean either severely cutting back on services, or raising personal and corporate income taxes.
Cutting taxes has been the mantra of governments everywhere for almost two decades now, but it may be time to revisit that attitude.
At the very least, we should start talking about it.
Keith Baldrey is chief political reporter for Global B.C.
