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British Columbia Finance Minister Kevin Falcon at the B.C. Legislature in Victoria, B.C., on Friday August 26, 2011. (Darryl Dyck/ The Canadian Press/Darryl Dyck/ The Canadian Press)
British Columbia Finance Minister Kevin Falcon at the B.C. Legislature in Victoria, B.C., on Friday August 26, 2011. (Darryl Dyck/ The Canadian Press/Darryl Dyck/ The Canadian Press)

Budget shows Liberals drifting left Add to ...

The catchy slogans have yet to be coined, and the placards are still in the design shop, but the playbook for next year’s B.C. election has been written in the provincial budget.



The Liberals were busy Tuesday trying to frame the debate, yet again, as one more faceoff between their vision of low taxes and fiscal discipline, and the NDP’s plans for a return to the nasty nineties of high spending and high taxes.

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“We believe the way you grow the economy is by lowering taxes,” Premier Christy Clark said, jousting with the NDP just before her Finance Minister tabled the budget.



The Premier should give that document a close read. In it, she will find a cancelled tax cut for small business, a planned hike in general corporate income-tax rates, yet another increase in the medical services premium – a tax in all but name – and for good measure, an increase in tobacco taxes.



The reality is that the Liberals have, in their continued drift leftward, given up the high ground of low taxes and will be reduced to arguing that they would raise taxes – but not as much as the NDP.



Finance Minister Kevin Falcon, for instance, attempted to plaster the high-tax label on his opponents by pointing out that the NDP would increase the corporate rate to its highest level since 2007, 12 per cent, undoing three rounds of cuts.



That’s true enough. The problem is that the Liberals are proposing to undo the last two rounds of corporate tax cuts, increasing the rate to its highest level since … 2008. It’s a difference, to be sure, but one that falls well short of the traditional rallying cry of socialist hordes beating at the door.



The continued rise in medical services premiums, an irritant when other taxes were falling, are yet another hurdle to the Liberal effort to remain the party of low taxation, as are the musings about turning the carbon tax into a cash cow for spending on green projects. (However, Mr. Falcon has bought himself at least a year’s breathing space with a lengthy review, and the decision not to increase the tax in July, 2013.)



Whatever the fine detail, the broad picture is one of a government willing to increase taxes to balance the budget, a break with Gordon Campbell’s tax-cutting mantra of the last decade. Mr. Falcon was more than willing to make that argument for increased taxes, saying that everyone, including businesses, needed to do their part to eliminate the deficit.



Sensible points indeed, but that nuanced position creates two big political problems for the Liberals. The first is the shrinking of the ideological gap with the NDP, one that was already closing as Ms. Clark announced increases to the minimum wage, a new statutory holiday and funding increases to social agencies.



The Liberals will be able to argue that they are showing some spending restraint, and will have to hope that the New Democrats will do them the favour of drafting a platform with outsized spending promises. (Of course, the mere fact that the NDP has so far declined to do so hasn’t prevented the Liberals from lobbing that accusation, including during the budget debate Tuesday.)



If there is some relief for Liberals, it’s that the Opposition has also yet to adjust to the new reality of a narrower ideological gap. Finance critic Bruce Ralston focused on casting doubt on Mr. Falcon’s commitment to raising corporate taxes, instead of mocking his opponents for their inconsistency.



As the gap on the left shrinks, the Liberals are allowing space to open up between themselves and the upstart B.C. Conservatives. Not long after the legislature had wrapped up, and not long after Conservative Leader John Cummins had driven away from the budget lockup in his pickup truck, the party sent out a press release with the devastatingly pithy headline: “Clark and Falcon deliver an NDP budget.”



Unfair, and possibly untrue, perhaps – but straightforward, most definitely. Mr. Cummins has no need to dwell on subtleties. For him, higher taxes and the continued existence of the carbon tax are a gift, a strategic opening. “I think Mr. Falcon is simply going to drive more people away from the Liberal camp with this budget.”

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