October 5 , 2009

UBCM Speeches

This year the Union of BC Municipalities (UBCM) celebrated 75 years since its inception as the "local government department". Formally incorporated under the Union of British Columbia Municipalities Act, the UBCM is a coordinating body between municipalities and a lobbyist with higher levels of government on behalf of municipalities.

In recent years a major event at the annual UBCM convention is the speeches from the Leader of the Official Opposition and from the Premier. Of course, Carole James is three and a half years away from the next election, so her role is limited to trying to hold the government to account. Her speech was widely reported as being sparsely attended by UBCM delegates, and criticized by a few columnists as going too far in saying: "As a first step to improve transit across the province and to meet our climate change goals, today I am calling on the provincial government to cancel the corporate tax cuts that are scheduled to come in over the next two years related to the carbon tax." The view of the media pundits is that when the government is in trouble, as the Campbell government clearly is, the role of the opposition is to get out of the way and let it defeat itself. The contrary view is that James deserves credit for laying out a specific proposal rather than taking the easy route and merely reciting the failures of the troubled Campbell government.

After taking power in 2001, Campbell announced $245 million per year in corporate tax cuts, including the exemption from the sales tax of production machinery and equipment, at a cost of $87 million for 2001-2002. That sounds much like part of what is claimed as a benefit 8 years later by way of an investment incentive supposedly flowing from the HST. After the 2005 election, Campbell was consistent in announcing another corporate tax gift, not discussed during the election. On September 14, 2005, Finance Minister Carole Taylor announced that the corporate tax income rate would be cut from 13.5% to 12.0%. Documents released by the Ministry of Finance at the time of her speech showed the cost of that cut, on an annual basis, to be $143 million. The corporate gifts in 2001 and 2005, announced after elections but not discussed during them, pale in comparison to the big HST surprise in 2009 which shifts $1.9 billion in tax costs from corporations to BC families.

For 2008, individual donations made up only $2.3 million of the BC Liberal's $7.9 million in income; for 2009 through the election period, individual donations made up only $1.9 million out of Liberal's $9.1 million in income. The corporate sector appears to have made a good investment in financing the BC Liberals; a tax shift of $1.9 billion per year forever appears to be a good return on a few million in political donations. It should not surprise anyone that NDP Leader Carole James seeks to claw back just a few hundred million of those corporate gifts so as to finance public transit, yet some in the media choose to portray her announcement as bewildering. The only thing that is bewildering is that there is not more outrage at the tax shift from corporations to BC families.

Campbell's 45 minute speech to the UBCM was noteworthy for how little it had to say; however, the Premier's speech commands greater attention since he has power and his slightest whim can translate into new public policy. He made only three new announcements: a square at the new convention centre will be named in honour of Jack Poole, a week will be designated Local Government Week and a committee will be established to recommend changes to the rules for municipal elections. That's a far cry from the multimillion dollar announcements in his previous speeches at the UBCM.

One interesting paragraph in Campbell's 2009 UBCM speech deserves particular attention. He said:

"When I asked you all to join us in the all-encompassing task of working on climate change, 176 communities agreed that they would sign B.C.'s Climate Action Charter - 176 communities. I want to congratulate each and every one of you for that leadership. B.C. may well be the only jurisdiction in the world where a state or province and virtually every one of its local government partners has undertaken to become carbon neutral by 2012. Thank you all very much for that commitment."

The full story is that in September 2008 Campbell told municipalities that they could receive a grant that would relieve them of the cost of his carbon tax if they pledged to be carbon neutral by 2012. The catch-22 is no one knows for sure what it means for a municipality to be "carbon neutral", who is measuring municipal green house gas emissions and what offsets some municipalities may qualify for as a result of their various programs. The devil is in the details and many expect Campbell to be long gone before anyone has to answer the questions that lurk behind his promises. Nevertheless, knowing that for the time being Campbell wields power, municipal leaders gave him at least two standing ovations.