"Premier's federal deficit proposal should be adopted by both Ottawa AND Victoria" says Fraser Institute Director
February 15, 1995
CONTACT: Dr. Michael Walker, Executive Director
Phone: 604-688-0221
Release Date: Immediately
MEDIA RELEASE
VANCOUVER>>>The four principles Premier Mike Harcourt outlines in his B.C.'s Proposal for Federal Government Deficit Reduction reflect sound economic policy," said Michael Walker, Executive Director of the Fraser Institute.
"The Premier is right: Ottawa should listen to B.C. taxpayers, cut waste, subsidies, and duplication, not raise taxes or tax rates, and all provinces deserve equal treatment. Prime Minister Jean Chretien ought to pay attention when a premier calls for an end to the Western Diversification Office and Scientific Research and Experimental Development investment tax credits."
"Other of the Premier Harcourt's suggestions, however, appear designed only to shelter provincial transfer payments from the same necessary fiscal medicine," said the Institute's executive director.
The Issue is Consistency
The Premier should insist the principle apply equally to subsidies to business and to high income Canadians who receive Old Age Pensions, Canada Pensions, and Unemployment Insurance. Federal spending should concentrate on essential services delivered to the Canadians most in need. Consistency would also require Harcourt to apply the same principles to his government's spending, borrowing, and taxation. The B.C. government raised taxes and borrowing rapidly particularly between 1992 and 1993. That added significantly to the tax burden carried by British Columbians now and those in the future.
The Fraser Institute recommends cutting spending and rolling back the major taxes and tax increases of 1992 -- that will give the B.C. government clout when making recommendations to Ottawa.
"What's good for the goose is good for the gander -- and, that is good for the taxpayer. Ottawa disproportionately raises its tax revenues from British Columbia companies and individuals. If Ottawa cuts its spending and borrowing but Victoria raises its own, the B.C. taxpayer is no further ahead. If both Ottawa and Victoria cut spending and stop borrowing, the taxpayer has some hope of tax relief," Walker remarked.
"On a positive note, the premier, by outlining his principles, will be better able to reduce B.C.'s spending, deficit, and debt ," said Walker.