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Adrian Dix, MLA for Vancouver Kingsway during a really where he announced he was entering the race for leader of the province NDP party in Vancouver January 17, 2011. (John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail)
Adrian Dix, MLA for Vancouver Kingsway during a really where he announced he was entering the race for leader of the province NDP party in Vancouver January 17, 2011. (John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail)

B.C. NDP's Dix tax proposal takes a big bite out of big business Add to ...

B.C. New Democratic Party leadership hopeful Adrian Dix is promising higher taxes for corporations, a proposed tax shift that sends shivers down the collective spine of the province's business elite.

The mining and forest industries are already fretting about the uncertain future of the harmonized sales tax. Mr. Dix, in a policy announcement on Wednesday, said he would recalibrate B.C.'s tax regime to favour the frail elderly over big business.

The New Democrats haven't won a B.C. election since 1996, when then-leader Glen Clark campaigned with a similar theme, under the slogan "On Your Side."

The party, however, was almost wiped out in the following election when the province's centre-right forces coalesced to end the NDP reign.

Mr. Dix, one of the front-runners for the NDP leadership, said he would roll back the last three rounds of corporate tax cuts. He noted that the Liberal government was raising Medical Service Premiums and fees for long-term care at the same time it was reducing the burden on corporations.

"That was a direct transfer from families of four earning $35,000 a year and frail seniors to large corporations. It doesn't make sense," he said. "I think most people think it's profoundly unfair."

Revoking the tax cuts would cost business $268-million in the coming fiscal year, he said. However, finance officials estimate the impact would be higher, that rolling back corporate tax cuts would add $425-million to provincial coffers. Mr. Dix said under his plan, the money would be used to "reduce inequality" and promote public transit.

Mr. Dix has already said he would kill the HST and re-impose the corporate capital tax on big banks and financial institutions. (The HST promise may be moot - the tax is subject to a referendum later this year, barring a snap election.)

Rick Jeffery, president of the Coast Forest Products Association, said Mr. Dix's proposal would stifle investment in B.C. and kill jobs.

"If he is a man of the people, he needs to stop drinking the socialist water because his position is deleterious to working people," he said.

But Jim Sinclair, president of the B.C. Federation of Labour, said the benefits of corporate tax cuts have been overstated. "It's a great line, but the forest industry got the tax cuts and then they cut 50,000 jobs," he said. While Mr. Sinclair has not endorsed any of the NDP candidates, he said Mr. Dix's plan "makes total sense. We have obviously gone overboard on tax cuts and we've suffered badly. We have the lowest tax rates and the highest child poverty rate."

Mr. Dix's campaign strategy has been to appeal to the NDP membership with aggressive attacks on the Liberal government. On Wednesday's announcement, the Liberal leadership candidates quickly took the bait.

Liberal leadership hopeful George Abbott said he was cheered to hear Mr. Dix reactivate "the leading edge of 18th-century socialism."

He added: "Adrian likes to hold out the plum that if we eat the rich, we don't need to get taxes from anyone else."

Mike de Jong, another Liberal candidate, said the proposal confirms that the possibility of Mr. Dix leading the NDP "makes being a free enterpriser fun again." He continued: "Usually people like Adrian Dix wait until they are in power before they start chasing jobs and investment away."

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