(Vancouver) The Canadian Centre for Policy Alternatives released a "Solutions Budget" today, which it says will restore economic and social security to British Columbians.
"The government's experiment isn't working," says Marc Lee, Economist in the CCPA's BC Office. "The belief that tax cuts and 'small government' would boost our standard of living, especially in the current economic climate, was a leap of faith and that isn't delivering. It's time to for the government to rethink its fiscal plans."
Instead, the CCPA calls on the government to adopt a more hopeful plan, outlined in today's publication Towards a Solutions Budget for BC. The CCPA's plan would ease the economic downturn, help those in need, and enhance the long-term prospects of BC's resource sectors and public services.
"The first priority is to deal with the impact of the recession on BC's economy," says Lee. "Now is not the time to cut government spending."
Fiscal recommendations are based on an economic model provided by Informetrica, the well-respected Ottawa-based economic forecasting firm. "Our Solutions Budget shows that spending cuts are not necessary or inevitable," says Seth Klein, the CCPA's BC Office Director. "We demonstrate how, by scaling back the tax cuts for upper-income earners and corporations, the province can modestly increase spending and boost job growth and the economy, while having the same budget impact as the Campbell-Collins plan."
According to the Centre's economic model, the government's current fiscal plan will increase provincial GDP by a mere $130 million in 2002. Under the CCPA's plan, this rises to over $500 million without increasing the projected size of the deficit, while also creating four times as many jobs for British Columbians. "This will allow BC to honor contracts and to help the most vulnerable, while still lowering taxes for the bottom two brackets," says Klein.
Over the long term, the Centre's "solutions budget" stresses new investment. A number of initiatives are recommended to revitalize BC's resource sector, such as providing tax credits to forest companies investing in value-added production and establishing a provincial resource investment bank to finance new projects.
The "solutions budget" recommends protecting BC's competitive advantages, such as low hydro rates and a highly educated and skilled workforce. It also includes creative ideas for addressing the stresses in the health care system, such as the revitalization and expansion of primary health care.
"The government says it has not choice but to cut spending. We disagree. This Solutions Budgets shows that there is an alternative," says Klein.