BC Budget Balanced on Backs of Low Income Families

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Last Thursday, the government introduced the June Budget Update 2013, which includes an additional $130 million cut to public services over the next three years.

It’s true that this isn’t a huge amount as a percentage of the overall government budget, but this comes after years of cuts that have already left our social services – such as income support, child protection, schools and hospitals – at the very end of their ability to support British Columbian families. So where’s the money going to come from and at whose expense? While our taxes may not be increasing over the next five years, our social services will be crumbling, and we’ll be paying back that debt for generations.

The fact is we’re already paying the price. The government’s focus on balancing the government budget, which for them means cuts to social services, leads to increased personal debt.

British Columbians have the highest household debt in Canada and the highest debt service burden, meaning we pay on average one dollar out of every ten dollars in disposable income to interest on credit cards and other personal debts.

That’s not surprising given that, over the last ten years, real median incomes have stagnated, even though we’re working harder. Meanwhile, the cost of living has gone up significantly. For many of us, rent puts a bigger and bigger hole in our paycheques every month, we’re paying MSP premiums (which no other province has, by the way), we’re paying outrageous fees for child care, we’re still paying off huge student loans, we’re subsidizing our kid’s schools through activity fees, and the list of expenses goes on.

Part of the government’s role should be redistribution to address market inequality but it’s not doing it as effectively as it used to. Personal tax cuts have disproportionately favoured the rich. In BC, the tax cuts that the top 1% of households received over the last 10 years have put $41,000 per year back in their pockets, more than double the yearly income of a full-time minimum wage worker. In contrast, lower income households received a tax cut of merely $200 per year, while those in the middle got just over $1200.

Overall, that amounts to $3.4 billion of lost revenue that the government could have used to balance the budget and spend on much-needed public services.

The government is trying to convince us that public spending is bad, and that we need to cut at all costs. But government spending has the potential to be an investment for British Columbians. It can rebuild the social supports that British Columbians need, improve economic productivity and save money in the long-term.

In relation to addressing poverty, paying for the negative effects of poverty costs much more than dealing with it directly. Poverty is costing us billions in this province right now. Higher public health care costs, increased policing and crime costs, lost productivity, and foregone economic activity add up to $8-9 billion per year. In contrast, the estimated cost of a strong, comprehensive poverty reduction plan, which would include affordable housing, universal childcare and more investment in health care and education, is only $3-4 billion per year.

BC has the largest gap between the rich and the poor, and the highest poverty rate in Canada, yet we are now one of only two provinces left without a poverty reduction plan.

The government continues to push its “Jobs Plan” as the answer but the reality is that most of the 510,000 British Columbians living in poverty already have a job. A minimum wage job barely lifts a single person above the poverty line in Kelowna and, if you have a child to support, you’re out of luck.

A comprehensive poverty reduction strategy for BC with legislated targets and timelines would address these issues, for the health and wellbeing of all, not just a handful at the top. A recent poll commissioned by the BC Healthy Living Alliance shows that 78 per cent of British Columbians support our political leaders committing to a poverty reduction plan.

Now’s the time to express your support. Find out what your candidates are going to do about the crisis of poverty in BC before you vote in the Westside-Kelowna by-election on July 10. Take the opportunity to ask them at the upcoming all-candidates debate this Thursday, July 4 at Lions Hall, 2466 Main Street in West Kelowna.

Are they going to continue to balance the budget on the backs of low-income families or recognize the huge cost of poverty to all of us, our communities and the economy, and commit to a comprehensive plan that saves lives and money in the long-term?

Trish Garner is the Community Organizer of the BC Poverty Reduction Coalition

Download the PDF here.


Any election advertising is authorized by the BC Poverty Reduction Coalition, registered sponsor under the Election Act, 604-801-5121.