Editorial — Latest B.C. tax hike announced
The provincial government announced its latest tax hike on Tuesday.
As has been the case in recent years, it did so indirectly. In fact, the announcement was made by the Insurance Corporation of B.C., which plans to raise its basic rates, which all motorists must pay, by 5. 2 per cent.
The province is expecting to get $480 million in dividends from ICBC in the three years from 2014 to 2017, and another $1.23 billion from BC Hydro. Both of these massive dividend payments are on the back of ratepayers — those who have no choice but to buy electricity from BC Hydro and basic auto insurance from ICBC.
This is being done so the government can balance its budget and claim to be a good fiscal manager. Meanwhile, the rate increases planned by both corporations are far beyond inflation, and are disguised as being necessary “because of more claims due to distracted driving” (ICBC) and “by the need for capital expenditures.” (BC Hydro).
No one doubts that there is a need for BC Hydro to upgrade its power network, or for ICBC to have enough money to pay for increased claims, whatever the cause. However, claims of balanced budgets by the BC Liberals really need to be dissected.
The government is not running a surplus from its day-to-day operations. It would be in a constant deficit if it weren’t for these dividends from Crown corporations. Both of these corporations were set up to provide benefits to B.C. residents. BC Hydro was set up by the Social Credit government in 1961 and ICBC was set up by the NDP government in 1973. Neither was set up to be an ongoing cash cow for the government.
The province does get additional revenue from the B.C. Lottery Corporation and the Liquor Distribution Branch, but there is a key difference. No one has to buy a lottery ticket or go to a casino. Nor do they have to buy liquor. Those are choices people make. They are free to choose not to use the services of those organizations.
This latest disguised tax increase is unacceptable.