We will not be undersold, the old TV commercials used to blare. If only the B.C. government would take that message to heart.
Like any business, governments are usually careful to make sure their taxation schemes are competitive with neighbouring jurisdictions. Virtually every government, at every level, compares themselves to their peers to ensure they are not driving out taxpayers with unnecessary higher rates.
The B.C. government is no different. Buried in the back of every provincial budget document is Table A3, comparing six tax scenarios for families, individuals and seniors in every province in Canada.
Not too long ago, these charts showed B.C. had the lowest personal income taxes in the country, which used to be the source of much back-slapping and self-congratulation for the BC Liberals.
In fact, the BC Liberal backbench still claims B.C. has “the lowest personal income taxes in the country for those earning under $121,000 per year.”
Unfortunately for taxpayers, that is no longer true. In four of the six scenarios listed in the budget document, B.C. now trails other provinces.
In the most common scenario, Saskatchewan and Ontario are beating us on provincial income taxes alone, and B.C. has fallen to third place on total tax burden behind Alberta and Saskatchewan.
According to Statistics Canada, the average B.C. household makes about $70,000 a year. Using the closest B.C. budget scenario – a double-income family of four, making $60,000 a year – taxpayers would pay $1,362 in provincial income tax in B.C., compared to $1,035 in Saskatchewan, and $1,164 in Ontario. Alberta sits at $1,777.
Add in property, sales, fuel, carbon and Medical Services Premium taxes, and that average B.C. family pays $6,736 in provincial taxes – nearly $2,800 more than Alberta and $1,600 more than Saskatchewan.
Alberta’s lack of sales and MSP taxes catapult them into first place. It’s no small amount – it’s like a new, extra $50 bill in your pocket every single week of the year, just for living in Alberta.
Our tax burden has surpassed our western neighbours, and it’s been noticed: Alberta and Saskatchewan have grown due to Canadians moving from other provinces, while B.C. lost 8,657 people to the rest of Canada in 2012. Apparently lower taxes and strong economies can overcome the advantage of living in “the best place on earth.”
Worse yet, B.C. taxpayers are losing ground compared to just five years ago. The 2009-10 B.C. budget noted the total provincial tax burden for the $60,000 per year family was $5,759, almost a thousand dollars less than it is today. That’s the biggest five-year jump, in real dollars, in the country – an extra $20 bill handed over to the B.C. government, every single week of the year.
To paraphrase a certain Great Communicator: are you better off than you were five years ago?
British Columbians are falling behind compared to other provinces, and compared to ourselves just five years ago. This lack of competitiveness will continue to hurt our economy. Like a whirlpool gaining momentum, it gets harder and harder for governments to push back against higher taxes.
But B.C. must push back. Our beautiful landscape, outdoorsy way of life, and mild weather can only overcome a certain amount of taxes. People are already beginning to vote with their feet, leaving our province for greener pastures – another spin that will continue to speed up if the BC Liberals do not reverse course.
Is Canada Off Track?
Canada has problems. You see them at gas station. You see them at the grocery store. You see them on your taxes.
Is anyone listening to you to find out where you think Canada’s off track and what you think we could do to make things better?
You can tell us what you think by filling out the survey