VANCOUVER (NEWS 1130) – Not everyone thinks B.C. Liberal Leader Andrew Wilkinson’s promised tax cut is a good idea.
Wilkinson announced on Monday that, if elected, his government would remove the provincial sales tax for one year and then raise it back up to three per cent the following year to help the economy recover from COVID-19.
However, former B.C. Liberal cabinet minister George Abbott doesn’t believe cutting the tax will necessarily stimulate the economy.
“First question I think that needs to be asked is why are we in a $13-billion to 14-billion fiscal hole? Well, clearly, it is not because of weak consumer spending, it’s because of a novel coronavirus,” he tells NEWS 1130.
It’s estimated a tax cut like the one Wilkinson is promising would cost $7 billion in the first year alone. Abbott believes there are better ways to spend the money.
“There’s a constant need for more social housing, for both the vulnerable, the frail elderly, and so on. Targeted spending in that area, to me, makes far more sense than simply foregoing billions of dollars of revenue from the provincial sales tax.”
Critics, including Abbott, wonder what government programs would be cut to pay for it, despite Wilkinson saying on Monday that no cuts to health or education would be made as a result.
Abbott’s recent book, “Big Promises, Small Government” looks at what happened when the Campbell government cut personal income taxes by 25 per cent in 2001 and then slashed social programs to pay for it.
- Lessons from the Campbell years could be applied to COVID-19 recovery
- B.C. Liberals promise to eliminate PST for a year if elected next month
“It’s really tough to find big dollars without looking at social ministries. That’s why I would always be cautious about making the fiscal hole any bigger than it needs to be coming out of this extraordinary period of COVID-19 that we’re in,” Abbott says.
B.C. Green Party Leader Sonia Furstenau also criticized the pledge, saying there are “far more effective ways to spend $7 billion.”
Meanwhile, NDP Leader John Horgan said cutting PST wouldn’t help British Columbians with basic costs for things like rent, groceries, car insurance, or childcare, adding “Those are already exempt from the PST.”
“It does save a multimillionaire $70,000 on a million-dollar yacht. And Wilkinson supports $3 billion in tax breaks for the rich,” Horgan added.
Find all our B.C. Votes 2020 election coverage here.