Go to the Globe and Mail homepage

Jump to main navigationJump to main content


Report on Business

Economy Lab

Delving into the forces that shape our living standards
for Globe Unlimited subscribers

Entry archive:

Economy Lab has moved

Only Globe Unlimited members will now have access to a wide range of insightful commentary
and analysis on the economy and markets previously offered on this page.

Globe Unlimited subscribers will be able to read these columns,
written by some of Canada’s most deeply respected economists,
such as Christopher Ragan, Sheryl King, Andrew Jackson, and Clement Gignac,
as part of our ECONOMIC INSIGHT section.

All of our readers will still be able to browse the Economy Lab archives and read our
broader coverage of economic data and news by accessing their 10 free articles a month.

Learn more about Globe Unlimited and how to subscribe.

B.C. Premier Christy Clark (ARNOLD LIM/Arnold Lim/The Canadian Press)
B.C. Premier Christy Clark (ARNOLD LIM/Arnold Lim/The Canadian Press)

Economy Lab

Clark continues B.C.'s budget fantasy Add to ...

Dr. David E. Bond is the retired chief economist of HSBC Bank of Canada

Christy Clark, B.C.'s new Premier is in a tight spot. Her predecessor, Gordon Campbell, stripped the cupboard bare spending on the Olympics.

Scores of important files were ignored, including a severely understaffed judiciary, a perverted energy market where electricity is sold south of the border for substantially less than what is paid for it in B.C., and absurd expenditures for things like a $500-million+ retractable roof on B.C. Place stadium.

And then there is the dreadfully unpopular Harmonized Sales Tax that Mr. Campbell introduced in his normal imperious fashion. An unprecedented campaign gathered enough signatures to force a referendum on the HST and it is far from certain the vote will be to approve the tax.

In an effort to gain voter acceptance Ms. Clark has offered special rebates and a promise to lower the tax by two percentage points beginning with 1 per cent in 2012 and another 1 per cent in 2013. Part of the cost of these cuts will be offset by a rise in the corporate tax but at the end of the day the province's net revenues will be down about a billion dollars. That fact was never mentioned in her brief statement announcing the changes.

Why Ms. Clark chose not to inform voters of the need for the revenue the HST would bring and what would have to be cut to offset the lost revenue should the referendum fail, or what taxes would be raised to close the budget gap, will never be known.

But it is evident that, like so many of her fellow political leaders in Canada, she must believe that voters will never accept tax increases and that they cannot understand the need for revenues to equal expenditure. True Clark and Company are not as bad as our U.S. counterparts who believe that they have an inherent right to low taxes yet limitless entitlements.

Eventually the reality will have to be faced. In the meantime Court back ups are ever growing, the education system continues to under perform, and infrastructure needs are being ignored. But we now have a retractable roof on BC stadium, a Vancouver convention centre that will never make money, a mixed up tax system and warm memories of the Olympics. Aren't we lucky?


In the know

Most popular videos »


More from The Globe and Mail

Most popular