The steadfast refusal by Albertan premiers to consider imposing a sales tax in aid of a faltering economy has been the subject of much questioning and prodding by columnists and economists in The Globe and Mail’s pages and others. Political suicide, probably, but worth at least a consideration, our Editorial Board has written.
So BC Liberal Leader Andrew Wilkinson’s election pledge Monday to eliminate the provincial sales tax in British Columbia for a full year raised some eyebrows as a policy dramatically difficult to reverse should the party win the Oct. 24 vote.
Mr. Wilkinson, whose party lost control of government in 2017 after 16 years in power touting fiscal prudence, argued Monday that the pandemic has changed the calculation on everything in public policy. Deficits are not as much an issue now, with every government in the Western world facing deficit spending to pay for health and education, to maintain necessary services, and to build projects, Mr. Wilkinson said.
“What we have to do is stimulate this economy, get people back to work, bring in investment and rebuild the confidence we have lost and get people working again,” said Mr. Wilkinson.
Mr. Wilkinson said in the following year, a BC Liberal government would also slash the 7-per-cent levy to 3 per cent. Combined, the measures over two years would leave an $11-billion hole in revenue for the province.
The Business Council of British Columbia said it had been looking for a PST cut, but that the elimination was “a bolder move than we had contemplated." Executive vice-president Jock Finlayson said he supported the move.
The Canadian Centre for Policy Alternatives called the promise a “big bang.” Marc Lee, a senior economist with the left-leaning group, said the CCPA generally supports deficit spending at a time like this, but “the capacity to do that isn’t unlimited.”
Political columnist Gary Mason provided some context around the Liberals' move. In the 2017 election, when the Liberals were favoured to win, the NDP upstaged the Liberals on an announcement around bridge tolls. The Liberals promised to cap them. The NDP pledged to eliminate them.
Gary notes the Liberals were likely attempting to usurp the spotlight in a similar way this week with their PST announcement, a “moonshot proclamation, one that prompts voters to think twice about the affection with which they apparently regard the governing New Democrats.”
It might work, Gary argues: The public has generally been in support of governments spending whatever necessary to help people and the economy come back from the devastation of the COVID-19 pandemic.
But it also might not work.
Writes Gary: “People’s minds are elsewhere right now. The last thing many are thinking about is going out to spend money in crowded restaurants and malls. This policy move is not going to get the same bang for the buck it might during normal times.”
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here. This is a new project and we’ll be experimenting as we go, so let us know what you think.
AROUND THE WEST
SASKATCHEWAN ELECTION: Premier Scott Moe is seeking a fourth consecutive term for his Saskatchewan Party, more than two years after taking over the job. The Premier has formally called an election, setting off the campaign ahead of the fixed voting day of Oct. 26. Mr. Moe took over in 2018 after former premier Brad Wall retired and he begins the campaign with a significant lead in opinion polls.
His main opponent is NDP Leader Ryan Meili, who has been warning that re-electing the Saskatchewan Party would set the province on a path of austerity at a time when people are struggling for work, waiting for medical services and wrestling with whether to send their children back to school. The Saskatchewan vote will be the third provincial election during the COVID-19 pandemic, after New Brunswick’s election this month and the B.C. election scheduled for Oct. 24.
TC ENERGY: Calgary-based TC Energy Corp. has laid off line workers and managers in its natural gas division as part of a restructuring. It’s the latest in a series of job and capital expenditure cuts in the Alberta energy sector, as companies try to protect their bottom lines in the face of continued low demand and declining revenues as a result of the pandemic. The company would not reveal how many people have been laid off but did confirm the restructuring.
TENT CITIES: Mayors from 13 of British Columbia’s largest cities will hold a news conference Wednesday to call on whichever party wins the current provincial election to come up with new strategies to deal with the increasing problem of homelessness. Tent cities are proliferating across British Columbia and the struggles of the people within them are complicated by addictions to deadly drugs and mental health problems. One mayor, Nanaimo’s Leonard Krog, says the time has come for the provincial government to consider that simply housing people may not be enough and that more institutional settings may need to be considered.
FOOTHILLS HOSPITAL OUTBREAK: The largest COVID-19 outbreak right now at a Canadian hospital is at Calgary’s Foothills Medical Centre, where dozens of staff and patients have fallen ill and four people have died. The hospital has restricted all but essential visitors and closed one of its cardiac units. Alberta Health Services has yet to determine how the virus got into the facility or how it spread through five units.
Deena Hinshaw, Alberta’s Chief Medical Officer of Health, said there is a clear link between most, if not all, of the infections, though she did elaborate on what that connection is. Dr. Hinshaw said it’s “concerning” that COVID-19 has spread within the hospital. As of yesterday, the infections included 31 patients, 27 health care workers and two visitors. There are 290 health care workers who are in isolation.
TREE PLANTING: British Columbia has planted a record number of trees despite the COVID-19 pandemic, which almost derailed the planting season in the spring. The province designated 5,000 tree planters as essential workers, allowing them to plant 300 million pine seedlings. The tree planting effort was deemed essential for ecological reasons, following several years of particularly destructive wildfire seasons. Workers faced COVID-19 safety measures throughout the season that involved not just face masks and hand sanitizer, but also strict measures such as a two-week isolation period for new arrivals and the hiring of security to ensure the tree planters didn’t wander into town when overnighting in hotels.
MANITOBA DRINKING WATER: Many drinking water systems in Manitoba are not licensed and lack a properly certified operator, the province’s Auditor-General said in a report Monday. The review by Tyson Shtykalo points to water-related health disasters in other parts of the country and urges the provincial government to boost its oversight. The audit looked at some of the 1,185 licensed water systems across Manitoba. Many are smaller, semi-public systems with fewer than 15 connections – mostly rural wells that serve homes, restaurants, schools and businesses.
B.C. SCHOOL CUSTODIANS: When students returned to school in British Columbia this month, they did so under provincial government guidelines that include putting students into groups, or cohorts, use of masks in high-traffic areas and added cleaning, especially of frequently touched surfaces such as doorknobs. On Sept. 17, the BC Teachers' Federation – which raised concerns about the plan immediately after it was released in late July – filed an application with the Labour Relations Board, saying that since school started, it has heard from many members that protection promised in the spring and summer were not on offer.
In its LRB application, the BCTF focused primarily on class size and remote learning options, saying the lack of provincial direction had resulted in “vastly different polices and practices across the province, resulting in significant inequities for students and staff.” There are also differences in districts' custodial agreements, which mean some districts may face more of a challenge in meeting cleaning guidelines.
SASKATCHEWAN COVID CLOSURES: An RCMP detachment and a high school have closed in a city in southeastern Saskatchewan because of COVID-19. Mounties said Monday that a front-line officer at their Yorkton detachment contracted the novel coronavirus and was isolating. Fourteen other officers and six civilian employees were also in isolation. Police said the detachment is closed to the public for non-emergency issues for two weeks, based on advice from public-health officials. Yorkton Regional High School is moving students to remote learning for the next few weeks after four people connected with the school tested positive for COVID-19.
UNIVERSITY FUNDING: Universities in Alberta say the provincial government should either delay an overhaul of how postsecondary schools are funded or change the system to ensure it accounts for disruptions related to the pandemic. Alberta’s governing United Conservative Party plans to switch to a model that will tie funding to a school’s performance in categories that could include enrolment, academic performance and postgraduation job placement. Advanced Education Minister Demetrios Nicolaides said he has no plans to delay the switch to performance-based funding, and he argued that the economic challenges brought on by the pandemic only make the policy more critical.
OPINION
The Globe and Mail Editorial Board on Alberta’s reliance on oil revenues: “But it has for too long been the fantasy of Alberta premiers that they can avoid imposing new taxes on their citizens, leaving it to oil to pay the bills. And it is mythical thinking to believe the province’s problems would disappear if Ottawa didn’t exist, or if the PM wasn’t one of those Laurentian elites.”
John Ibbitson on Western alienation: “The estrangement between Alberta and the Trudeau government is dangerously deep. Yes, that government nationalized the Trans Mountain pipeline. But it killed other pipeline proposals and imposed a carbon tax. Its onerous environmental regulations and general hostility to the Alberta natural resource economy have driven businesses out of the province.”
The Globe and Mail’s Editorial Board on the carbon tax Supreme Court hearings: “As a matter of science, greenhouse gases are clearly a national concern. But as a matter of constitutional law, a federal victory at the Supreme Court is far from assured. Our Constitution, and more particularly the way it has been interpreted over 153 years by the courts, has created a highly decentralized federation.”
Editor’s note: A previous version of this article incorrectly said the PST cut would leave an $11-millon hold in the provincial budget. In fact, the cost would be $11-billion.
Wendy Cox
James Keller