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February 20, 2007

Budget 2007-08 - Those that got get!

BC Budget 2007 flaunts the statutory requirement for reporting major capital costs, and it repeats the pattern of the Campbell government for looking after those who least need it.

Styled "the housing budget" by Minister of Finance Carole Taylor, the budget announced a $50 per month increase in the shelter allowance for people on income assistance. The budget documents estimate the increase in the shelter allowance will cost $33 million in 2007-08; they say the $50 increase is: "providing recipients greater access to the housing market; or allowing them to spend support money on food and other necessities rather than on shelter cost." A fact sheet from the Ministry of Employment and Income Assistance revealed that the government says nothing about allowing recipients to spend the $50 on food, but the suggestion defies credibility since even with the $50 increase most recipients have to use their sustenance allowance to top up rent. According to the fact sheet, support and shelter rates for children will be standardized so a single "expected to work" parent with two children would receive an increase of 18%. The fact sheet states: "The full cost of all rate increases will be $58.1 million in 2007/08"; it also states that 135,000 individuals will benefit from the changes. Keep those numbers in mind when we look at who else benefits from the 2007 Campbell budget.

The budget announced a 10% cut in income tax for everyone making $100,000 or less. Statistics from Revenue Canada reveal that 179,440 British Columbians filed income tax returns declaring between $70,000 and $100,000 in income in 2004. That's a third more than the number who will benefit from changes to welfare. The 179,440 tax filers paid $865.6 million in provincial taxes in 2004, so they will get a collective tax benefit of $86.6 million as a result of the cuts announced in the 2007 budget. One way of looking at it is that the average benefit in the form of a tax expenditure for those making between $70,000 and $100,000 is $482, while the average annual benefit per person on welfare is $430. Another way of looking at it is that 5.9% of BC tax filers have incomes between $70,000 and $100,000, yet they will receive over 16.8% of the benefits from the tax cut.

On October 3, 2006, the Campbell government announced a rental assistance program for working families making less than $20,000 (those on welfare were deemed ineligible). It estimated that the program would benefit 15,000 families and would cost $40 million per year. In Budget 2007 the Campbell government announced that its four month old program would be expanded by raising the income threshold to $28,000 and said that would benefit over 20,000 lower income working families. The budget documents show the cost estimate for the increase in the program threshold as $40 million; one might think that means that $80 million will be spent on rental assistance in addition to the old program that was limited to seniors, but the service plan for BC Housing shows the cost estimate for rental assistance increasing from $25.5 million in 2005-06 to $89.0 million in 2007-08. That increase of $63.5 million appears to be short of what the government suggested as the extent of its program. Could it be that it is double counting seniors receiving SAFER as if they are benefiting from the new program? No details on the program can be found in the budget documents or in the service plan for the Minister responsible for Housing. The government has yet to explain why it doesn't use MSP premium assistance records to directly contact everyone who is eligible for the program so as to assure that they receive the benefits to which they are entitled, and it has refused to provide me with a simple table showing the number of families receiving premium assistance by level of assistance. If the government is proud of its housing plan, it should be able to answer simple questions on how many families have subscribed since the October announcement and how that number compares to MSP premium assistance records.

The Budget Transparency and Accountability Act specifies documents the government must table in the Legislature, together with the "main estimates", on the third Tuesday in February. Those documents include a Strategic Plan, Service Plans for each Ministry and a statement on major capital projects (exceeding $50 million). The fast ferry project produced the requirement to report information on major capital projects so as to provide warning if a major project was going off track. Under the Campbell government the major capital project report has seen the budget line revised at the same time the forecast line is revised, so in order to see what is going off track, it is necessary to compare the statements from year to year. Last year as part of Budget 2006-07, table 1.20 showed that the provincial portion of the Vancouver Convention Centre expansion project was estimated to cost $273 million by the time the project is compete. In recent weeks we have seen headlines about how the cost of the project has ballooned to over $800 million with the province on the hook for the full amount of the increase, yet table 1.23 (page 52) in Budget 2007-08 shows the estimated cost to completion of the project to be $281 million. No one believes that the cost has increased by just $8 million. It appears that the Campbell government's attitude on compliance with the Budget Transparency and Accountability Act is the same as its attitude when it comes to Freedom of Information and Protection of Privacy. You simply can't believe their numbers. More will be written on that in the days ahead.


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