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March 15, 2010

Budget Illegalities

Having lost the trust of many voters with their surprise flip-flop on the HST just two months after the election, has the Campbell government gotten into even more trouble by flaunting, perhaps violating the Budget Transparency and Accountability Act?

Thanks to the union at ICBC, COPE 378, we know that the Campbell government is taking $778 million in "excess optional capital" from the insurer over the next three years, starting with $487 million this year (see page 26 of the ICBC service plan).

Other researchers dug into the budget documents and discovered an increase from 7% to 12% on the tax charged on the private sale of used cars, boats and aircraft. That tax grab was not mentioned in Table 2.1 (page 79) of the budget documents, but noted on page 88 without providing revenue estimates; Table 2.1 purports to summarize tax measures in the budget, Table A9 (page 159) shows an estimate of $125 million this year and $171 million next year for that tax (5/12s of which is new).

When Colin Hansen appeared on Voice of BC with Vaughn Palmer following the budget, I asked if this year's budget was like last year's, hiding damaging details that would leak out over subsequent months. Hansen ducked the question, but aside from what we've since learned about cuts to social services and the arts, the exposure of details with respect to ICBC and the sale of private vehicles raises the question of whether the government violated the Budget Transparency and Accountability Act.

Table 1.2 (page 9) in the budget documents lists "Changes from the September Update 2009". That table includes items as small as minus $15 million for health and human resources for 2010-2011, which makes the point that $487 million from ICBC and $52 million for private vehicle sales are "material" (big enough to be mentioned) as most accountants would say. Others would simply say that it is less than honest to hide over a half billion in revenue grabs. [Correction: Table 1.2 has a line for tax on private sales of vehicles.]

Section 7(1)(b) of the Budget Transparency and Accountability Act requires: "a statement of all material assumptions and policy decisions underlying the economic and fiscal forecasts for that year." By hiding over a half billion in revenue grabs the Campbell government appears to have violated the Act. The question is whether guilt should be assessed by the courts, the court of public opinion or the Auditor General.