M&M's CFAX Top 10 for 2010

Every Monday morning, usually right after the 10:00 am news, Maureen Bader and CFAX 1070 host Murray Langdon talk about tax policy and government accountability (or lack thereof) issues. Much of what we discuss flows together, but I've tried to separate the issues as much as possible to make a top 10 issues for 2010 list. 

10. Olympics

Although this was the biggest news story for 2010, we barely talked about it because all I would have done was remind people about the legacy of debt and higher taxes the limitless spending would bring -- a big downer during a big party. As a December 2010 PricewaterhouseCoopers report showed, the games produced $2.5 billion in GDP. That's nice, but they cost upwards of $10 billion, so that means $7.5 billion in other opportunities were lost. Even worse is the loss of an important lesson -- government monument building projects are great for politicians and bureaucrats, but taxpayers get stuck with a legacy of debt and higher taxes.

9. Corporate Welfare

Governments love picking winners and losers and the film business is a good example. It is a popular target for government largess -- and not just in B.C. Across North America, politicians line up to throw other peoples' money at Hollywood millionaires, even though other people might have other ideas about how to spend their money. In 2010, the B.C. government gave the film industry a bunch boutique tax credits that are nothing more than corporate welfare. Why? Because film companies don't have to actually pay any taxes to get these 'tax credits' -- all they have to do is spend. For example, if a film company applies for a tax credit of $10,000, and doesn't owe any income tax, it still gets a refund of $10,000. That's a handout.

8. Government spending, the deficit and debt

Spending in B.C. has been out-of-control for a while now. B.C. government spending hovered at about $30 billion per year between 2001 and 2004 then started to ramp up in 2005 as that dreaded second-term spending disease infected politicians looking to buy their way to re-election. Spending soared to $39.3 billion in 2009 and is expected to hit $41 billion in 2010 and $42.3 billion in 2012.

Meanwhile, the B.C. provincial debt sits at about $48 billion now and is expected to rise to about $57 billion by 2012, almost double what it was in 2006. All we need to do is look at what's happening right now in Europe to see where living beyond our means leads -- fiscal austerity programs and even riots in the streets.

6. Health Care

We've discussed unsustainable health care spending a fair bit because health care spending is already the biggest single spending item in the budget and is spiraling out-of-control. In 2001, health care spending totaled $10.6 billion, or 34.8 per cent of all government spending. It now totals $16.5 billion and will climb to $17.9 billion by 2012, or 42 per cent of government spending. Without reform, the health budget could eventually take up all the government budget.

The government has convinced a lot of people that the health tax, or MSP premium, will somehow help pay for this. The B.C. government, in its 2010 budget, took some hated taxes, like the HST and MSP and rebranded them as “health taxes.” This was a tacit admission that MSP has always gone into general revenue, not to pay for health care. That's because the MSP is a poll tax – a per-person tax charging a fixed amount per individual. This health tax went up by 6 per cent in the 2010 budget and if it continues to increase at this rate, it will double over the next nine years, forcing families to pay a health tax of  $2,736 per year.

5. Crown Corporations

We discuss different Crown Corporations, but the one we talk about the most on this program is BC Ferries. Our BC Ferries discussion is often related to the Freedom of Information and Protection of Privacy (FOI) Act.

BC Ferries was partially denationalized  a few years back but still operated as a government monopoly and still got millions of taxpayer's dollars every year. Because of the partial denationalization, it was no longer subject to the FOI Act. That meant we couldn't find out what the executive or board salaries were. After it was revealed that BC Ferries CEO made over $1 million per year, and a report by the Comptroller General that found the Board of Director's pay was 3-5 times higher than allowed under Treasury Board rules, BC Ferries was brought back under the act. It is possible to bring accountability back to Crown Corporations.

4. Other Taxes

Property Transfer Tax (PTT). The PTT was brought in by the Vander Zalm government in 1988 and became such a fantastic cash cow that no government since has eliminated it. Yet, the B.C. government knows the PTT is a bad tax. A motion at the BC Liberal Convention in 2006 moved that the government abolish the PTT.  The resolution was passed with overwhelming support and is part of BC Liberal party policy. It's time for them to follow through.

New tax cut cancelled - In a last ditch attempt to bolster his popularly, Premier Gordon Campbell announced a 15 per cent reduction in personal income tax. When that didn't work, he just cancelled it, then announced his resignation. I hope the new Liberal leader brings that back because the Premier's rationale for the tax cut - leave money in the hands of the people it belongs to, because they are able to make the best spending decisions with it - was right.

3. Environmental Policy

It seems the government may be jumping off the global warming bandwagon, and not a moment too soon. Climate change started dropping off the world agenda late last year when the Climategate revelations showed that some climate scientists were playing fast and loose with the data.

Under Premier Gordon Campbell, B.C. brought in a carbon tax and joined the Western Climate Initiative (WCI), a regional cap and trade scheme. The carbon tax now sits at 4.5 cents per litre and will rise to almost 7 cents per litre in 2012. This is nothing more than an attempt to appear to be doing something about global warming. The government never expected the carbon tax to reduce gasoline consumption. In its own budget documentation the year the carbon tax was implemented, it expected gasoline consumption to go up. Meanwhile, the carbon tax has had little if any effect on GHGs. According to the Ministry of the Environment, B.C. GHGs went up by one per cent between 2007 and 2008.

Interest in the WCI, the regional cap and trade scheme, is waning. One member, Arizona said it would not participate in the scheme, and legislators in Utah are urging the governor to drop out as well. B.C. must do the same. 

The BC government has also given tax dollars to private companies in an effort to create a type of corporate welfare of another colour. But as the example of Spain shows, government subsidies to the green energy sector kill jobs in the productive sectors of the economy. Unemployment in Spain now hovers around 20 per cent. 

Governments around the world are cooling to global warming. Experience in Europe shows how energy taxes kill jobs and leave seniors shivering in the dark. Denmark, for example, imposed high carbon taxes, and the result was manufacturing job losses and some of the highest energy costs in Europe. With the price of oil heading back up to $100 per barrel, it's time to stop the global fooling.

Choosing between number two and number one was really difficult, but in the end, the number two most discussed topic was:

2. Municipal Issues

We talked about a wide variety of municipal issues this year. The biggest was the steady increase in property tax rates driven by non-stop municipal spending hikes driven by big salary entitlements for municipal workers. Municipal pay hikes are going on in some communities even while the biggest private employer, and largest single property tax payer, teeters on the brink of closure. For example, the mill in Elk Falls, near Campbell River, was shut down after Catalyst Paper was unable to come to an agreement with the municipal government and the union local. This means a residential property tax rate increase in Campbell River of 14.5 per cent in 2010.

We discussed how people can fight City Hall and Win. Dawson Creek, Victoria and West Vancouver are but three examples of municipalities where citizens have organized to get spend-happy municipal governments under control. People in other municipalities should be empowered by these efforts. We must ensure our children and grandchildren are not left with a legacy of debt and higher taxes.

  

And now, it should come as no surprise, that the number one issue discussed during our time together in 2010 was:

1. HST

We talked a lot about the HST, but our discussion didn't focus so much the tax itself. It focused more on the No-HST group's successful use of the Recall and Initiative Act. This Act was designed to ensure no group would ever be able to bring an issue forward for either a vote in the legislature or a referendum. Much against expectations, the No-HST group was able to get enough signatures on its petition to force the government to act.

The success of the No-HST campaign makes it clear that people are tired of politicians who say one thing before an election and do something else after. It's time for change, so although the No-HST campaign may not be able to get rid of the HST, it has created the opportunity to re-think how political decisions are made. People want more control over political decision making the way forward is obvious  – it's time for direct democracy in B.C.

Energy taxes kill jobs and leaves seniors shivering in the dark

In my article in the Province newspaper today, I talk about Denmark's experience with the carbon tax. Denmark imposed high carbon taxes and the result was manufacturing job losses and some of the highest energy costs in Europe.

 

The Danish government started taxing energy with a carbon tax in 1991. By 1998, manufacturers started closing because of high energy prices. Danish carbon tax revenues declined, as did the number of manufacturing jobs.

By 2001, economic growth had slowed to almost zero. Danes making over CAD$50,000 paid 59 percent of their income in taxes and also had to cope with record high electricity prices.  That year, the sitting government was thrown out of office. The incoming government promised a tax freeze, followed by tax reductions – including reductions to the carbon tax.

All the hardship did reduce Denmark's greenhouse gas emissions, the purported goal of carbon taxes.  Overall, emissions fell by 10 percent between 1990 and 2005, but the country’s manufacturing employment dropped by 25 percent.  So while a carbon tax can reduce emissions, it is at the cost of jobs and a population struggling to pay its heating costs.

Natural History of Government Intervention

Milton Friedman, in his book Free to Choose (don't we wish), writes about the government intervention life cycle. It goes something like this:

1. A real or imagined evil creates a demand for something to be done about it.
2. A political coalition forms. This is usually made up of high-minded reformers and sincere interested parties.
3. Their big ideas lead to incompatible objectives, such as low prices to consumers and high prices to producers at the same time. This incompatibility is glossed over by fine talk about the public interest, social justice, or these days, climate justice.
4. The coalition succeeds in getting government to pass a law that 'does something' about the perceived problem.
5. The preamble to the law pays lip service to the fine talk and the body of the law grants government the power to 'do something.'
6. The high-minded reformers bask in the warm glow of triumph and move on to new causes.
7. Interested parties go to work to ensure power is used to their benefit, and they are usually successful.
8. Success breeds problems and this creates the call for more intervention.
9. The bureaucracy takes its toll, so even the special interests may no longer benefit.
10. In the end, the effects are exactly the opposite of the goals of the reformers and may not even achieve the objectives of the special interests.

Once we get to this point, the activity is so firmly established and so many special interest groups are connected to it, that repeal is unthinkable. So, new government legislation is called for to 'do something' about the new problem and the cycle starts again.

This is the cycle we have to break. To do that, we must reject the mother of all fallacies - that government is the solution to all our problems. We need to remember -- we are the captains of our soul, the masters of our fate. 

Don't confuse tax rates with tax revenue

People on the left of the political spectrum are often heard complaining about the cut in corporate tax rates. They seem to think that if tax rates are cut, corporations won't be paying "their fair share of taxes." This reasoning shows the confusion between tax rates and tax revenue. When tax rates go up, governments can actually collect less in tax revenue, not more. That's because a tax discourages what it is applied to. If corporate tax rates are high, corporate investment is discouraged. The best way to increase tax revenue is to lower tax rates. This encourages business investment, leading to more economic activity, more job creation and higher government tax revenue.

Lower taxes create the incentive to work, save and invest and B.C.'s experience shows how rate cuts lead to economic growth and higher tax revenue. Income tax rates have decreased since 2001, yet total tax revenue went up.

The B.C. government cut personal income tax rates by 25 per cent in 2001 and 10 per cent in 2007. In 2010, the basic personal exemption rose to $11,000, leaving more money in the pockets of taxpayers at all income levels.

Meanwhile, the government cut corporate income tax rates from 16.5 per cent in 2001 to 10.5 per cent in 2010. Rates are expected to fall to 10 per cent by 2011.

The government also cut small business taxes, from 8.5 per cent in 1999 to 2.5 per cent in 2008. It also increased the amount of small business revenue subject to the lower tax rate, from $400,000 to $500,000.

Yet between 2004 and 2007 personal income tax revenue rose from $5.1 billion to $6.9 billion, corporate income tax revenue rose from $1.3 billion to $2.3 billion and revenue from all taxation rose from $14.9 billion to $19.4 billion, before dropping off because of the economic downturn. 

A growing economy, not high marginal tax rates, increases tax revenue.

Spending hike? No way.

The B.C. deficit still higher than promised.

Back in 2001, the Campbell government promised a 'real' balanced budget law to make deficit budgets illegal. This 'real' law flew out the window at the first sign of trouble. Although the budget deficit for 2009-10 is lower than forecast, it is still a deficit, and that was not the deal. To fulfill its promise, the government must bring the budget back into balance and to do that, it must make real spending reductions.

Deficit spending helped stimulate the province into have-not status during the 1990s and it was spending restraint that helped create a budget surplus in 2004, B.C.'s first since 1990. The economy grew and citizens prospered, but that fiscal responsibility didn't last.

B.C. government spending started to ramp up in 2005 as that dreaded second-term spending disease infected politicians looking to buy their way to re-election. Spending hovered at about $30 billion between 2001 and 2004 then soared to $39.3 billion in 2009, a 31 per cent increase. True, a few tax dollars have shifted lately out of some entitlement programs, but they've just added to the growing number of tax dollars still flowing into other programs. If we care about the well-being of our children and grandchildren and want to leave them with something other than a legacy of debt and higher taxes, we need to turn the direction of government spending around.

When Premier Gordon Campbell said, "I hate budget deficits, I think they take away from future generations," he was right. The government must regain the fiscal prudence it preached in 2001 – the one that helped them sweep into office with 77 seats. Unless the government gets a handle on spending, the deficit, debt and taxes will inevitably rise – and that, Mr. Premier, is fiscal child abuse.

No-HST group ups the stakes in response to referendum decision

On September 13, 2010, Premier Gordon Campbell announced the question of whether the HST would stay or go would be put to a referendum, and not just any kind of referendum, one that would require a only simple majority.   This decision, just like the HST decision itself, took everyone by surprise.

Under the Recall and Initiative Act, a referendum  (called an initiative vote) is successful if more than 50 per cent of registered voters in the province, and more than 50 per cent of registered voters in at least 2/3's of the electoral districts, vote in favour of the referendum question. This is a very high hurdle to jump, especially in ridings with big population turnovers. 

However, Gordon Campbell said, “If 50 per cent of the people who show up at the polling booths next September say they want to get rid of an HST then certainly, as a government, I would want to get rid of the HST.”

Quite likely, the main reason Premier Campbell decided to go for a referendum a year from now was to take the steam out of any recall campaign. Liberal MLAs facing recall could explain to their constituents that the voice of the people will be heard in a referendum, so there is no point in recalling them. This would help Liberal MLAs keep their seats because it not easy to recall an MLA. To get recalled, people collecting recall signatures need to get 40 per cent of citizens registered to vote in the previous election. In ridings with a lot of turnover, like Gordon Campbell's riding, it would be virtually impossible to find enough people who were registered to vote in May 2009 to successfully recall him.

In fact, the No-HST group announced which MLAs would face recall campaigns today. They include Colin Hansen, Bill Bennett and Ben Stewart, but not Gordon Campbell. This is apparently because the premier is expected to step down sometime before the next election. The No-HST campaign is upping the stakes by targeting these MLAs.  

HST snoozefest - what are the options?

The Select Standing Committee on Legislative Initiatives met for the first time on September 6, 2010 to start talking about the next step for the No-HST petition -- should it be voted on in the legislature or should it go to a province-wide referendum. Talk during the tedious meeting, and some comments by Premier Gordon Campbell, hint at where the committee may be heading.

The meeting, a snoozefest otherwise loaded with procedural stumbling and bumbling, saw NDP MLA Jenny Kwan make a motion to send the bill to the legislative assembly for a vote as soon as possible. She said that would be the quickest way for MLAs to be responsive to their constituents.

Eric Foster, a Liberal MLA, countered with a motion to adjourn debate on the NDP motion. He said the committee should be fully informed on the mechanics of the two options. The Liberals have a majority on the committee so they passed Foster's motion.

Eventually, the committee's big decision of the day was to meet next Monday when the Chief Electoral Officer, or someone from Elections BC, will tell them what they need to know about a referendum vote.

What are the tea leaves saying about what may happen? The Liberal committee members showed a lot of interest in the possibility of a referendum and wanted to know more about the cost. Then, on Sunday September 12, Premier Gordon Campbell said in a radio interview he was hearing from his constituents that they wanted to have their voices heard. So at the moment, the leaf pattern says 'referendum.'

A referendum is a good idea. Not only can people vote on an HST question, more questions could be added to a referendum ballot. 

Question could include: if the HST is gone, should the PST be brought back?  If not, where will the $6 billion dollars now left in the pockets of the people who earned it be cut out of government spending? Also, provincial taxpayers will have to pay back the $1.6 billion in bribe money from the federal government -- where will government cut spending? Or, should the government just add the $7.6 billion to the deficit? A bigger deficit or lower spending - a very valid question that citizens should have a say in.

A referendum also provides an excellent opportunity for citizens to vote on other issues. For example, who from B.C. will fill the next Senate seat. A sitting senator from B.C., Gerry St. Germain, retires in 2012. Here's a chance for people to have their say on who represents us in the Senate. 

It also provides an opportunity for citizens to vote on other issues. Why not put B.C.'s top issues to a referendum vote. How to decide which are B.C.'s top issues? One way is for groups to collect petition signatures and the three, say, that collect the most signatures get their issue put to the people. Possible issues include proportional representation, tax cuts, treaty settlements, or more subsidies for high-cost energy options like windpower.

We are at a crossroads in our democratic process. Without a doubt, people in B.C. are demanding more direct say in the decisions of government. The committee has the opportunity to start the process.

Intolerable intolerance

Tolerance implies no lack of commitment to one's own beliefs. Rather it condemns the oppression or persecution of others.

John F. Kennedy

Many have opinions about how other people should behave. Although it might be irritating, trying to convince people to change their ways it isn't a problem. It is a problem, though, when one person uses the government to stop other people from engaging in peaceful, cooperative behavior.

Couldn't happen in Canada, you say? Yes it could. A complaint from just one person is enough to ban kite flying in parks, close down lemonade stands and force dogs out of bookshops. Intolerance is on the rise and is supported by government.

For instance, the phrase "go fly a kite" has taken on a literal meaning in Ontario -- no kite flying in a park. In a truly mind-boggling example of littering law enforcement, a bylaw officer shut down kite flying in a Toronto park because a city worker complained about the kite string getting caught in trees and city equipment. However, if kite flyers are told to get lost, who's next? Quite frankly, this type of heavy-handedness is intolerable in a free society and should be condemned.

Instead of shutting down what any reasonable person would consider normal behavior in a park, the city government should have curbed the intolerant city worker. The government could have quoted the Rolling Stones song and said, in a free society, "You can't always get what you want." So far, however, in the battle between kite flyers and one city worker, the city worker has the upper hand.

This intolerable overkill isn't restricted to Ontario. We have similar narrow-mindedness right here in B.C.

In Port Coquitlam, a bylaw officer shut down the lemonade stand of two 12-year-old boys because the boys didn't have a business license. According to Port Coquitlam Councillor Glenn Pollock, the city would probably have “looked the other way,” except one person complained. Public parks are for all members of the public, not just those who seem to have some pre-defined view of who belongs in a public park. However, in the struggle between one intolerant park user and little kids in Coquitlam, it seems intolerance, with the help of government, gets the upper hand.

Even dogs get shafted by the intolerant. In Victoria, a petty tyrant took her toll at the Herald Street Books and Coffee shop. Bubba, a Jack Russell terrier, delighted customers for three years before one person complained. After that, poor Bubba was left to languish at home alone. In this case, the more tolerant among us should have pointed out not everyone has the same opinion about dogs in cafes. However, here as well, the tyrant got the upper hand.

Should people tolerate everything? No, it is OK to criticize someone's behavior and open up a discussion about it. However, it is not OK for one person to use the power of government to force other people to behave according to their definition of the good and the right.

So what behavior should be condemned? Selling lemonade, flying a kites, and sipping lattes with dogs, or using the power of government to shut those peaceful activities down? The answer to the question seems clear.  Using the power of government to force other people to bow down to prejudices is unacceptable in a free and democratic society. If you don't want to clean kite wire out of trees, find another job; if you don't like lemonade, don't buy it; and if you don't like dogs in cafes, don't go to cafés with dogs.

Many people seem to be losing their ability to 'live and let live' and are using the government to impose their dictates on others. If this continues, it will pit neighbor against neighbor and eventually no one's freedom of action will be safe. So if you trip over some kite wire in a park, pick it up and put it into the trash then write a letter to the editor or call in to a local radio show to let people know that littering is wrong. Tolerance of other peoples' behaviors, attitudes and dreams shows a respect for each person's autonomy over their own life. We must all re-discover the virtue of tolerance.

Time for direct democracy in B.C.

The success of the No-HST campaign makes it clear that people are tired of politicians who say one thing before an election and do something else after. It's time for change, so although the No-HST campaign may not be able to get rid of the HST, it has created the opportunity to re-think how political decisions are made. People want more control over political decision making the way forward is obvious  – it's time for direct democracy in B.C. and today's technology makes it possible.



Now, with advances in Internet technology, it is possible to have cost-effective, direct citizen involvement in decision making. Internet voting already exists in Switzerland and the US. Right here in Canada, the Regional Municipality of Halifax already has Internet voting and found elections costs were reduced. Technological advance means the timing couldn't be better for the B.C. government to implement an Internet-based voting system, for elections and referenda. It would put control back into the hands of citizens and cost taxpayers less than traditional voting systems.

Why must we explore this possibility in B.C. today? Precisely because of the problems the No-HST campaign has encountered with the current system.

Read the full story  here

HST - what's next?

On Friday, BC Supreme Court Chief Justice Robert Bauman decided the No-HST group's scrap-the-tax bill is valid and can go ahead to a committee of the legislature. That will probably happen today.

This all transpired because a group of business organizations wanted a judge to decide whether the scrap-the-tax bill was something the provincial legislature could actually vote on. The No-HST group's scrap-the-tax bill calls for the HST to be 'extinguished' in the provincial legislature. The business organizations said the HST legislation is federal legislation so the provincial government doesn't have the authority to scrap-the-tax. However, the judge said the bill conforms to the spirit of the Recall and Initiative Act and so the original decision of the B.C. Chief Electoral Officer to approve the bill was correct.

The next step is for the No-HST group's draft bill to go to an obscure committee of the legislature, the Select Standing Committee on Legislative Initiatives.  The committee was formed 16 years ago after the Recall and Initiative Act was passed, but because no initiative has ever gotten this far, it has never met -- until now.

The committee has 90 days after its first meeting, which will probably happen in September, to decide between two alternatives. Should the draft bill go to the legislature where it could be amended, passed or defeated, or should the bill go to a province-wide referendum. That decision will probably happen around the end of December. If the committee decides the bill should go to a referendum, the referendum would likely happen in September 2011.

The business groups also asked the judge to rule on the constitutionality of the No-HST bill but the judge said that "is a question for another day."

To complicate matters, there is another court case. The No-HST group, headed up by Mr. Vander Zalm, got a lawyer and is challenging the constitutionality of the HST itself.  According to Mr. Vander Zalm's lawyer - the tax is "nullity" because it wasn't explicitly authorized by the provincial legislature. Remember - the only vote in the provincial legislature that had anything to do with the HST was the one to get rid of the PST. What the provincial government signed with the federal government was an implementation agreement  - there was no vote in the provincial legislature on the HST itself. The HST is a federal tax, not a provincial tax. The judge also left the decision on the constitutionality of the HST for another day.

So the HST drama continues. Looking farther ahead, what we can see is a great opportunity for the government to follow through on its 2001 election promise to create workable recall and initiative legislation. The No-HST's campaign success is a clear indication that people are tired of having government dump decisions on their laps and they are ready for change. The government has the opportunity to appease an angry electorate by bringing more direct democracy to B.C., and workable recall and initiative legislation would go a long way in achieving that goal.

HST drama - what's up with that?

The HST drama is playing out in court, starting today, Monday August 16, 2010.

A group of business organizations are challenging the bill proposed by the No-HST group. Recall that the No-HST group's scrap-the-tax bill calls for the HST to be 'extinguished' in the provincial legislature. The business organizations say the government's HST legislation is federal legislation so the provincial government doesn't have the authority to scrap-the-tax. Hence, the court challenge.

To complicate matters, there is another court case. The No-HST group, headed up by Mr. Vander Zalm,  got a lawyer and is challenging the constitutionality of the HST itself.  According to Mr. Vander Zalm's lawyer - the tax is "nullity" because it wasn't explicitly authorized by the provincial legislature. Remember - the only vote in the provincial legislature that had anything to do with the HST was the one to get rid of the PST. What the provincial government signed with the federal government was an implementation agreement  - there was no vote in the provincial legislature on the HST itself. The HST is a federal tax, not a provincial tax.

To try to understand what's going on, let's take a step back.

A provincial law called the Recall and Initiative Act, allows any registered voter to start, or initiate, a bill, or piece of legislation. That's what the No-HST group did. They drafted the scrap-the-tax bill and got it approved by Elections BC. The next step in the initiative process was to sign up 10 per cent of all registered voters in every electoral district in 90 days. The No-HST group did that too.

Next, the signed petitions were delivered to Elections BC and it was Elections BC's job to makes sure there were enough valid petition signatures. Elections BC checked and there were enough valid signatures.

The next step was for Elections BC to send the scrap-the-tax bill to a committee of the provincial legislature. Elections BC didn't.

Craig James, the acting Chief Electoral Officer, decided to hold off on this step until the court cases, which starts today, are decided.

So democracy has to wait for the outcome of the court cases. However, what this process has taught us is we need workable tools to make our democratic system accountable to the people it is supposed to serve. The next step is 'workable' recall and initiative.

Mayor pay -- up and away

Having a citizens' committee recommend remuneration for local politicians is a step in the right direction, but as we saw with the pay hikes at Port Coquitlam (PoCo) City Hall, another step is needed. To keep local politicians accountable to ratepayers, the provincial government must limit their ability to tax and spend by capping property tax rates. 

The PoCo mayor and council recently gave themselves a big raise. The mayor's salary is up 27 per cent and council's salary is up a whopping 42 per cent. According to PoCo Mayor Greg Moore, this pay boost was OK because it was recommended by a citizens' committee.

Oh really?

The committee's March 2, 2009 report says that although "Council is worth more than the current compensation … [it did] not recommend a market adjustment at this time due to current economic conditions where unfortunately wage freezes, rollbacks and layoffs are common place (sic)."

So, do current economic conditions now justify a market adjustment for mayors and councils?

While the PoCo mayor and council, and some in other municipalities seem to think so, not all do. In 2010, the Burnaby mayor's pay goes up by 17 per cent, the Coquitlam mayor's by 4 per cent and the Vancouver mayor's (the highest paid in the Lower Mainland) by 3.8 per cent. However, in other municipalities, such as West Vancouver, Maple Ridge and Penticton, the mayors and councilors will take no pay hike in 2010 because of the -- wait for it -- current economic conditions!

So although some mayors and councilors curbed their salary increases in an economy that is still seeing wage freezes and layoffs, others showed no such restraint.

But the PoCo citizens' committee made another recommendation. According to the report, mayor and council pay should be adjusted by the consumer price index (CPI) starting January 1, 2010. According to the Statistics Canada December 2009 CPI report, the B.C. CPI was zero. So either way, the PoCo pay hike was not in line with the recommendations.

Still, some people say the pay hike in PoCo, although much bigger than many other municipalities, is no big deal -- it will cost the average homeowner the same as an expensive café latte - but don't be fooled. In PoCo, property tax and utility fee hikes will increase costs for the average homeowner by $140 dollars in 2010, and that's after a $170 increase in 2009. That's about 40 lattes per year. At this rate, in ten years, the average homeowner will be out about 400 lattes. Now that's a lot of lattes.

So what can be done to stop local politicians like those in PoCo from slowly decaffeinating ratepayers? Mayor and council pay hikes are a symptom of a much bigger problem -- the unlimited power to spend. To limit this power and bring accountability back to local government, the Canadian Taxpayers Federation recommends the provincial government cap property tax rates. In this system, the municipal government would know how much revenue to expect each year and it would then have to prioritize its spending. It would mean making spending choices instead of raising taxes and fees to cover off every spending whim. Citizens could then voice their opinion on those choices at election time.

You can learn more about how the property tax cap works at www.taxpayer.com.

However, getting the provincial government to help won't be easy. When asked about the big pay hike in POCO, the Minister of Community and Rural Development, Ben Stewart said, "If we were hearing as a government that it was a priority, we would have to make legislative changes and that isn't currently something I'm hearing about." So the provincial government will need a push to step up to the plate.

Yes, forming a citizens' committee to determine pay is a great idea, but ratepayers need some assurance that the mayors and councilors are doing more than just using committee recommendations as a cover for an unjustifiable pay hike. Without action from the provincial government -- without a property tax cap -- the picking of ratepayers' pockets will go on and on, year after year. It's time for that to change.

You can make your views known by contacting the Minister of Community and Rural Development, Ben Stewart, at 250-387-2283 or ben.stewart.mla@leg.bc.ca

Paid Volunteers

The B.C. government made big headlines when it decided to pay some of its bureaucrats to volunteer during the 2010 Olympic Games in Vancouver. It cost B.C. taxpayers $560,000 for the privilege of giving 376 bureaucrats the opportunity to hang out at the Olympics instead of working at their desks. However, this was nothing less than a slap in the face to the real volunteers who freely gave of their time. 

My sister was one of the volunteers who freely gave of her time. 

She says it's difficult to get people in Canada to freely volunteer and wonders why. 

To explain why people volunteer less now than in the past, I turned to Fredrick Hayek's book 'A Road To Serfdom.' He talks about what happens to traditional values in a socialist system, and this illustrates why there is less volunteerism in our society today. 

Morality flowers in an environment where: we are responsible to our own sense of right and wrong and not to the demands of someone else; we know what we should be doing and do it without being coerced; and we take responsibility for, and bear the consequences of, our decisions. 

Responsibility is exactly what the socialists of all parties promise to relieve us of. Governments today try to regiment and regulate every aspect of human action and leave nothing to chance. Relieved of personal responsibility, we have no reason to take action when we see a problem. 

The effects of this are long reaching and destructive. Far too many people seem to think that if they demand it, whatever 'it' happens to be, the State has the responsibility to do it. The assumption seems to be every social problem should be, and can be, fixed by the State.
But there is an impact on our sense of right and wrong if we do something ourselves or if we shout out for the state to 'do something' about it. 

After all, why would any one of us bother to lift a finger when someone else needs help if it's the responsibility of the State to 'do something'? This goes a long way in explaining why we have less volunteerism in our society today.

Tax Talk on CFAX

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