Yesterday in Mission, I presented the CTF's 2015-16 pre-budget submission to the government's Standing Committee on Finance and Government Services. Below is the draft Hansard transcript from that presentation.

J. Bateman: Thank you.

I think I say this every time I come and present to your committee, but you are the hardest-working committee in provincial politics, particularly this year, when you're in Victoria. You're kind of sandwiching your committee work around the sitting this fall.

D. Ashton (Chair): Jordan, can you say that one more time for Hansard?

J. Bateman: You're the hardest-working…. I'll make sure to send a memo to the Premier and the Leader of the Opposition so that they know, too. It's good to know.

This year I had the delight of sitting down and writing up a presentation to you. Some of my old chestnuts are gone. Usually I would come here and recommend the elimination of the Pacific Carbon Trust. That's been taken away.

I used to come here and recommend full disclosure of MLA expenses. Gosh darn it, you've gone and done that too.

I came one year and talked about slowing the increase in health care spending, and we have seen British Columbia bend down the curve on that.

J. Bateman: I know. This is great. I appreciate the fact. Even reducing the size of the PavCo board — the government did that as well.

It's exciting to look back over the past few years and see some of the policies that have been put into place either by accident or on purpose. I'll just take a victory lap, though, and pretend it was all because of these presentations and the work of this committee.

This year I wanted to come in and speak to you about debt reduction. Debt reduction is something that, frankly, has been back-burnered in recent years. I think after the 2008 fiscal meltdown, governments of most political stripes felt the need to spend in order to stimulate the economy. That's water under the bridge now, but we're seeing in B.C. post modest surpluses — knock on wood — and I know that this committee will receive literally billions of dollars in spending requests from well-meaning, amazing community groups and other folks that have come and presented to you.

I wanted to put in for some debt reduction with surplus money. I have a section in here on a debt reduction act. Really, it builds on the Alberta model. Nothing happens by accident in government. You have to have a strategy, a plan. You have to have a dedicated philosophy when it comes to things like debt reduction.

It's easy to say: "Ralph Klein paid off the debt through oil and gas money." Certainly that was a huge part of it, but he had to have a plan in place to make sure that those surpluses were actually being applied to the debt. He did that through a couple of pieces of legislation, including a debt reduction act.

This is a big priority for our supporters. We did a quick survey of our B.C. supporters. We had more than 1,000 responses within 48 hours, many of whom wrote many comments. I read them all and tried to distill it to some of the best ones in here.

For our supporters, they feel that for every dollar of B.C. budget surplus, at least 62 cents of it should go towards debt reduction. They see the value in reducing the debt, therefore reducing interest costs and gaining that great snowball effect that happens when you start to pay off debt.

So bcdebtclock.ca has been set up by us. It's a real-time accounting of the provincial debt — $62 billion. In the 15 minutes that I spend talking with you today, the debt will go up by about $140,000. So, large numbers that we need to get under control.

The second piece of legislation that we wanted to recommend was around improving budget controls. Essentially, what we're suggesting is a legislative financial accountability act. To put it in the simplest terms possible, we believe that any time a bill is introduced into the Legislature, there should be some type of price tag, pricing, attached to it.

We feel it's very important that our politicians, our elected officials, don't order from a menu without knowing the cost of the bill. We'd like to see that applied to every bill — government, opposition, independent bills, all of those — taking a look at what the costs are. A cost estimate to implement and a cost estimate going forward, so we know.

Yesterday, obviously, we saw in the House of Commons the federal NDP leader talking about a national daycare program — billions and billions and billions of dollars of spending. It's important that we have cost estimates on all of these different programs, so that we know, as taxpayers and as the people who monitor the budget, exactly what the cost of this legislation is.

That's a very significant thing for our supporters. They've been asking for this for a long time. Some of them call it a truth in budgeting act. We just call it a legislative financial accountability act.

Then, finally, the last piece of new work we've done is around local government spending. I know this is a touchy issue, especially with some former municipal leaders, myself included, in the room.

We were pleasantly surprised by the provincial government's leadership in commissioning the Ernst and Young report on municipal wages. We think this is an important issue provincially, because if municipalities are overpaying for labour, that drives up the cost for provincial taxpayers because eventually the province will have to match that money.

We make some recommendations in here, including one we steal from Mr. Morris's hometown of Prince George around equipping smaller communities with professional negotiators to match up with CUPE and other unions — IAFF probably even more so than CUPE. Matching them up with professional negotiators — is there a way for the province to help co-fund those professional negotiators, realizing that the tax dollars saved at the property tax level can be invested in other things?

Can we create a wage index across all of these different levels of government, Crown corporations — the hundred most common jobs that virtually every municipality, regional district, provincial government agency or Crown corporation has — actually comparing the wages across and seeing if we can start to give our negotiators better information? There's a section in there on that as well.

That's all I have. The key for us is debt reduction above everything else. That just snowballs. Once you get the debt under control, you find yourself with more excess cash and capital to spend on many of the priorities that you've heard about here. Debt maintenance now, I think, is about $2½ billion or $2.8 billion a year. That's about 50 percent of the education budget. One wonders, if you had another $3 billion in your pocket, what we could do with that.

These are the issues going forward. We hope that we're moving into a time of robust economic growth that sees huge surpluses being posted. We're cheering for big, in-the-black budgets, and we can start having the discussion about what to do with those surpluses.

D. Ashton (Chair): Thanks, Jordan. Questions?

E. Foster: Thanks, Jordan, very much. Back to your comment about the local government and the taxation. As you say, most of us come from local government, a lot of us. It's a huge challenge. I guess my ask or my question is…. You know, your comment: "Okay. We've got to get this under control." We, certainly, as a government have said, "Look, this is a serious issue, because we're all one taxpayer."

Your comment on sort of having a scale, if you will. The cost of living in Terrace is a lot different than the cost of living in Vancouver or in the Okanagan, where property values are way out of control, costs are out of control. How do we do that?

J. Bateman: Yeah, I think we have to.... If you're putting together a wage index, I think you would want to compare comparable communities. There may be certain jobs that don't exist in Terrace that do exist in Victoria, for example. You'd want to be sensitive to that.

You're absolutely correct. I mean, this is the problem, frankly, with the arbitration system for the firefighters. They don't take into account a community's ability to pay. Everyone is gauged the same way as whoever signed the first deal, which I think was Delta or Richmond this time around.

In my community, in Langley, the firefighters are looking for 20 to 25 percent pay increases over four or five years. That's completely beyond the public's ability to pay. I was speaking with the mayor of Prince George, Mayor Green. She's desperate to try to get this under control because the deal that was cut in Richmond for some reason affects what's going on in Prince George.

You're absolutely right. We need to do a better job of divvying up the province into the regions or at least the cost-of-living regions. That makes sense. That would have to be taken into account in the index, for sure.

G. Heyman: Thank you very much for your presentation. I think we all, obviously, share a desire to ensure that citizens' tax dollars are used effectively and efficiently. The debt certainly is an issue that we're aware of. In fact, we've seen the greatest increase in the provincial debt that we've ever seen over the last three years, in terms of the speed of its rise. It's huge.

But I'm going to ask you a flip side of the question. We've sat around the province for many days hearing numerous submissions, as you pointed out, from various community groups and institutions seeking stable funding or more funding.

Many of them come with what appear to be quite creditable studies — obviously, we'll have to check those out — that indicate that an investment in certain services, whether it's education or a certain kind of health care, will actually pay significant dividends, although not in the first few budget years. But down the road they'll result in far greater need for expenditure for a different range of social supports or health care.

On the assumption that at least a number of those are accurate, but given the drive to balance the budget on an annual basis, what would you say, or what would the Taxpayers Federation say, is an appropriate way for us to deal with questions that actually could save the taxpayer a significant amount of money over the long term and help pay down the debt or prevent further debt from accumulating but require certain decisions now that are difficult to make in this climate?

J. Bateman: I think weighing the short term versus the long term is the eternal crisis of every elected official, unless you're serving for 30-year terms. That's just bound to be the constant balancing act. For us, we see reducing the debt as a path to actually opening up capital for those long-term investments. It's one of the reasons why we're so supportive of a legislative financial accountability act. Give us those hard numbers.

You're right. Business cases need to be made for these things. They need to be credible. They need to be independent. Frankly, you can have 1,000 great business cases; you're not going to have the money to invest in all of them. You just don't have endless revenue or endless resources. So it'll take wisdom and very careful planning. Frankly, we like governments to set priorities. The government will have to decide how those priorities match with those business cases.

For us, though, you're right. The business case element is.... Of all the things that happened in recent years as far as budgeting and groups presenting cases to government, the move towards business cases and proving out costs long term is a very positive step, because it does give you a better handle as to what your investment may render down the road.

D. Ashton (Chair): Two minutes left.

G. Holman: Thanks, Jordan, for the presentation. Always very detailed. I'll take this to bed tonight.

Two questions.

One. Particularly given some of the recommendations made previously about B.C. Hydro and the concern around its debt situation, we've had a number of presenters around Site C expressing concerns about the $8 billion proposed investment there. According to B.C. Hydro, the first four years of its operation, because the power isn't needed immediately, would result in $800 million in losses. Do you have a view on that, particularly given your concerns about B.C. Hydro?

My second question is a little more provocative, I guess. Our tax rates have been going down over the past decade. Do you see a relationship between declining tax rates and forgone government revenue and B.C.'s, as George described, increasing debt situation?

J. Bateman: On Site C we don't have an official position. We have supporters who are…. Frankly, they're split down the middle on Site C, so we've chosen not to take a position, other than the fact that we want to make sure the business plan is credible, obviously. An $8 billion investment is a mind-boggling amount of money for a government monopoly. I don't want to get too far into that.

On the tax rates. If you go to page 5, the truth is: taxes ain't as low as we think they are. This is a graph from the B.C. budget document comparing income tax rates for families of four making $60,000 a year. We chose this number because it's the scenario closest to the average household income in B.C., which is just a shade under $70,000.

If you take a look at that, B.C. actually, in provincial income tax, lags behind Saskatchewan, lags behind Ontario. If you go to the total provincial tax, point 8 there, you see that we're actually behind Alberta and Saskatchewan as far as overall provincial tax burden goes.

This is a good reminder to us that taxes…. The Fraser Institute calculated, I think, 45 percent of an income now goes to taxes. We hear from many families — and people on fixed incomes, especially — that they feel strapped. They don't have the ability to pay any more. One of our things has been that we almost need a summit of all these different taxing agencies and levels of government in a room to talk about the overall burden that British Columbians can handle.

The $8-a-month increase for ICBC seems fine in isolation, but you add it to the MSP, add it to B.C. Hydro, add it to EI, CPP…. All of a sudden it starts adding up and becomes unbearable.

D. Ashton (Chair): Jordan, I have to cut you off. I'm sorry. I apologize.

J. Bateman: Okay. The next line was going to be brilliant, though, Mr. Chair.

D. Ashton (Chair): I apologize, but I treat everybody the same. Thank you for your input today, Jordan. If you have anything else that you want to submit by Friday the 17th, electronically, we'll take anything else. Have a good day, and thank you for coming.

J. Bateman: Excellent. Thank you.