The following is a transcript of Jordan Bateman's speech (and Q & A) to the BC Select Standing Committee on Finance and Government Services, where he presented the CTF's 2016-17 BC Budget recommendations.

J. Bateman: Thank you for allowing me to speak today. I appreciate it. I've given you a very chunky report here. It's actually two reports. One is our budget recommendations. Then the second half is an analysis we did on food and drink taxes, which I know have come up a few times and that I'll talk about in a second.

The Taxpayers Federation, as you know, is a national organization. We're a not-for-profit, non-partisan organization. We fight for three things — lower taxes, less waste and more government accountability. Anything you all recommend that are around those three things, we're going to love.

I actually feel like the CTF and this committee have a lot in common. We often all make recommendations that the government takes, and we never get credit for them.

For example, in the past five years — this is my fifth presentation to this committee, I believe — we recommended full disclosure of MLA expenses. Of course, we can all go on line and check your expenses later today. We recommended: the Pacific Carbon Trust elimination; a slowing increase in health care spending; a core review, which just happened; a balanced budget act; and also reducing the size of the PavCo board of directors.

I appreciate the fact that ideas that can be fed to your committee, even if they don't make it to the report, can often be accepted by government. I also understand the challenge you face. I've been following closely on Hansard. I've done a quick calculation that you've heard about $11 billion worth of spending requests. It's going to be quite a challenge for you all, with a budget of $45 billion.

Our recommendation to you — this will fly in the face of a lot of what you've heard — is to not spend that money, to please remain focused on balancing the budget and to encourage the Finance Minister to apply as much of the surplus to the debt as possible. That's why we titled our report this year Save Our Surplus.

Despite the fact that the B.C. government has an operational surplus — the operational budget is balanced — B.C.'s debt did increase by $2 billion last year. That's $500 million a quarter. It has reached a record high of almost $65 billion, and it's still projected to reach $69 billion by March 31, 2018.

Anything we can do to reduce that debt and reduce the debt financing costs will give more money in the government's coffers later on to do things like increase funding for Kwantlen.

We're recommending a few different things. One of them is a debt reduction act. This was actually promised by the government in the last provincial election. We've yet to see that act come through. Hopefully, with this budget cycle, we'll see that promise realized.

The key for us there is we would like to see 75 percent of surplus applied to debt repayment every year. That still leaves 25 percent to do other things. There are always other priorities; you've heard many across the province. But we need to get this debt under control. Every dollar we put into that saves us money down the road as far as debt servicing costs go.

A few other recommendations. I should note that we consult our supporters. There are almost 90,000 of them across Canada who identify as CTF supporters. We talked to our supporters about their recommendations, and this shapes our recommendations here.

We want to see a review of the Medical Services Plan tax. We actually want to see it frozen for a year while we review it. This is a tax that's becoming more and more important to government coffers. We understand that. At the same time, it's becoming a greater and greater expense for both families and seniors and for businesses who pay it as part of a payroll. Since 2010, we've seen almost a 40 percent increase in that tax.

It's my least favourite bill every month when I sit down and pay the bills. It's coming up to $150 a month for my family to pay this MSP. It's wonderful to have the lowest income taxes in the country, but that's a bit of a false statistic when you have $150 a month going out the door in MSP.

It's an unfair tax, and we think it needs to be reviewed for a number of different reasons. We need to know what the true cost of collecting that tax is. It's a separate bureaucracy from the actual income tax collection. Is it efficient in the way it's collected? We have no idea. We would like more information on that.

We want to see some more information on the recent increases and whether it meets the taxpayers' ability to pay. The government has taxpayer accountability principles. Ability to pay is part of that. We want to know if it's still meeting that.

We want to know whether the MSP is actually accomplishing the goal of linking health care usage to health care taxes. This is something finance ministers like to talk about: "Well, you need to know that health care isn't free." I think we all know that. But is it actually meeting that target? This isn't an insurance premium where if I never leave the couch and I'm smoking four packs of cigarettes a day and I'm skydiving out of planes when I do leave the couch, I'm paying more for my health care premiums than if I'm living with low-risk behaviour. This is the sort of thing that we need to talk about. If we're actually wanting to link these health care taxes to health care system usage, that's one thing. But that isn't happening with this MSP.

Then, also, in fairness, related to income levels, it makes no sense that a family making $30,001 a year pays the same in this tax as Henrik and Daniel Sedin do, and they make $9½ million a year. That shows us that this tax has not had the proper attention paid to it.

Then also, we'd like to know…. There don't seem to be any concrete statistics on how many people actually pay this tax, as compared to their businesses. I know that employment is a big focus of this government, and rightfully so. Payroll taxes erode employment rates. If this is being paid by the majority of businesses, that is a payroll tax and we need to look at the effect of that on employment. Is that a way we can actually spark more employment — by making it cheaper to employ people? That's something else that needs to be talked about. So that's MSP.

A few other recommendations new this year. We'd like you to resist these misguided calls for food and drink taxes. The provincial government, the Ministry of Finance, actually did a review of food and drink taxes a couple of years ago. The fine people at the Ministry of Finance termed it purely a revenue measure. There was no link that they could find between it and health care. It has been an abysmal failure in a country like Denmark. The folks who support the tax like to talk about Mexico. Denmark is a lot more like British Columbia than I think Mexico is, especially when you look at the cross-border shopping. There's a full report in here that talks about that.

The substitution effect. If Coca-Cola is more expensive, you'll go down the aisle and buy Sun-Rype juice or milk or alcohol or something else that has other negative effects, so this is a slippery slope that we want to see stopped.

A couple of other quick recommendations. We're asking that the government resist the capital regional district's request for a 2-cents-a-litre gas tax hike. There's an audit going on B.C. Transit right now. We'd like to see the results of that audit before we just hand over more gas tax to the CRD. We think it's prudent to see if B.C. Transit is running efficiently and effectively and if they're maximizing their other revenue opportunities.

Then finally, the carbon tax. When the carbon tax first came in, about 38 percent of its revenue was returned to people through personal income tax cuts — part of the revenue neutrality.

Today only 22 percent comes back to us through those cuts. The government has used it to fund all sorts of boutique tax credits, which have benefit for industries and other payers, but we've gotten away from the burden on the average person. The best way to take care of that is to reduce income tax with carbon tax revenue. We'd like to see that percentage looked at again.

That's all I have. I want to say thank you, and I appreciate any questions you have.

S. Hamilton (Chair): Thank you very much, Mr. Bateman. You're a fountain of figures.

C. Trevena: Thanks very much for your presentation, and thank you for including your previous recommendations as well. I look forward to going through those.

My question is about MSP and the suggestion to freeze it, to review it. As I understand it, it's just us and Quebec that have MSP. I know that Alberta tried to bring it in; it failed. In Ontario, when I was living there, it didn't have it. They brought it in; it failed. I'm wondering if you've got, either through yourselves or other taxpayers federations in the different provinces, any figures on how much the section of income tax — I believe it comes under income tax — is going into health? I mean, if you've got any breakdown of figures.

What we hear all the time is, "We really need to pay this because it's the only way we can afford our health care," whereas, as you say, there is a huge disparity between the income and affording it. We all pay the same. I'm just wondering if you've got any figures on what happens in other provinces.

J. Bateman: Bluntly, there's a dearth of information about the MSP. Academic researchers — very little about it. Across the country, Alberta actually had it for quite a while and then scrapped it about ten years ago.

If there's anything you'd like to know, I'm going to spend my year digging into this further. That's one of the reasons I want to see a review. I'll take that, if you don't mind, and get back to you in a few months and do an analysis. The health care budget is — what? — $17 billion a year; $2½ billion comes to us through MSP. That really isn't covering the full weight. So if I could, I'll get back to you on that.

C. Trevena: I'd be very interested to hear what comes of that. Thank you.

S. Hamilton (Chair): We have about four more minutes and just as many questions.

S. Gibson: We've had some fairly, you might say, cogent presentations on the advisability of providing some disincentives for sugared drinks. I see your material here. It's quite well done. Is it your view that a tax, even a nominal tax, on sweetened drinks will not be a disincentive? Well, you say, they'll just move to other products.

I'm not advocating this. We're still working this through as a committee, but the presentations have been interesting. According to stats from Mexico, it was successfully discouraged — the amount of drinking of sweetened drinks. The point that was being made by a doctor who presented here to us was that that would actually be less costly for the taxpayers in terms of health-related services for those who are obese. Maybe you'd like to comment on that a bit.

J. Bateman: Yeah, the report actually looks at those kinds of things. It's false. For every doctor you get recommending this, there are doctors who recommend against it, who don't see the value of connecting the two. The report goes into a number of interesting scenarios, for example, Canadian levels of obesity. Under our rules, "The Rock" and Sidney Crosby would be considered obese. Clearly, Sidney Crosby is not obese, but these are the kinds of stats that get thrown around in order to shape this recommendation.

Look, Mexico has a much lower income than British Columbia's. British Columbia has a cross-border shopping problem. It's not so bad at this moment because of the lower dollar, but it can certainly come back. When the dollar was at par or higher, I was living in Langley, and I'd get flyers already from Blaine and Bellingham grocery stores, advertising food products there.

In Denmark, German companies, German supermarkets, send flyers into Danish homes saying: "Come shop in Germany; no food or sugar tax." And it drew. The numbers across borders went from one in three, crossing the border to shop, to one in two. We can't do that in British Columbia without crippling the south regions.

There's a lot of good information in that. I'm hopeful that you'll take a look at it.

S. Hamilton (Chair): I have three more questioners and less than three minutes. I'm willing to either take them all on notice, or fast questions, fast answers.

C. James (Deputy Chair): I'll be quick. Just a question around the debt issue. As you probably know, there are a number of economists right now who are saying that with low interest rates, with the sluggish economy, that it's actually a smart time to look at borrowing money, and it's a smart time to be able to look at building infrastructure to kick-start the economy, etc. I just wondered if you have any thoughts on that.

J. Bateman: Well, we've gone from $33 billion worth of debt in 2006 to $69 billion in 2018. Chances are we've borrowed plenty. I don't think we need to continue to heap up the debt there. We've put up a lot of money into future infrastructure here, and now's the time to start reeling those debt payments back in.

G. Heyman: Thank you very much for making a strong case for a progressive income tax system versus flat taxes. My question has to do with your desire to find money for government expenditures, capital investment and debt reduction without raising taxes.

You campaigned against transit, which would relieve congestion, which studies demonstrate is costing the B.C. economy significantly, on the basis that TransLink could find the money on its own. I think most people who run the numbers say they may be able to find some savings, but they won't be able to build significant infrastructure without it. So why — feel free to do this in writing — do you think it is not possible to do both things at the same time and, therefore, meet your goal of essentially priming B.C.'s economy as well as the livability of the region?

J. Bateman: On TransLink, I can answer that pretty quickly because it may not be the first time I've heard this question. We never campaigned against transit. We campaigned against TransLink. We were very clear all the way through. We offered a different plan — notranslinktax.ca/betterplan — municipalities applying a small percentage of their future growth.

Municipal government revenues are growing at a far faster rate than provincial and federal, than inflation. They have money there that they could apply towards these different programs. The entire mayors plan could have been funded by allocating 0.5 percent of their 5 percent annual growth rate to it. So we did offer a different perspective on that.

Our surplus recommendation is 75 percent debt reduction. That still leaves 25 percent to spend on other priorities.

S. Hamilton (Chair): Out of time.

Spencer, can we take it on notice, please?

S. Chandra Herbert: Yes, we can.

I'm just curious which tax credits — digital media tax credits, Film Incentive B.C. production services tax credits — does the CTF recommend getting rid of in order to move back to income tax cuts?

Also, I'm just curious. You refer to the ever-increasing carbon tax. What do you mean by that given that the tax has been frozen for a number of years?

J. Bateman: I'll return that to you by e-mail.

S. Hamilton (Chair): Before the 15th of October, please.

J. Bateman: Before the 15th? Okay.