2012 to be more expensive for B.C. residents
Some costs increasing at much higher rate than the rise in average income
B.C. residents will pay more in the coming year for health care, electricity, car insurance and gasoline.
Critics say the increases don't always make sense, particularly when they hit lower-income residents at the same rates as richer citizens, while the provincial government maintains British Columbians pay some of the lowest taxes in Canada.
The first provincial increase comes into effect on Jan. 1, when health-care premiums rise by six per cent, an increase of $84 a year for families of two or more.
It's the third year in a row that fees have increased, bringing the total premium for families to $128 per month. The family health-care premium was $108 per month for most of the 2000s until increases began in 2010.
A month later, the Crown-owned Insurance Corp. of B.C., which has a monopoly on auto insurance in the province, will increase its rates.
In February, basic premiums will jump by $68 a year -- 11.2 per cent -- for the average customer, but when combined with cuts to optional rates, ICBC says the average customer will be out an extra $27.
BC Hydro is set to increase its rates by 3.9 per cent as of April 1, which the Crown corporation says will cause the average residential power bill to increase by about $36 a year. That's about half what BC Hydro had proposed earlier this year until the provincial government ordered the corporation to come up with a smaller increase.
In July, the province's carbon tax will increase to $30 per tonne. The tax on gasoline will hit 6.67 cents per litre, up from the current tax of 5.56 cents.
Drivers in the Vancouver area will pay even more after local mayors voted to impose a two-cent gas tax beginning this spring to pay for a rapid transit line that will link Vancouver with Coquitlam and Port Moody.
EI and CPP also more expensive
Jordan Bateman of the Canadian Taxpayers Federation said the series of increases may be more than some families can handle, particularly when combined with increases to federal employment insurance and Canadian Pension Plan premiums. Those together will take about $142 from workers' paycheques.
He noted municipal property taxes will also likely rise for many residents this summer.
"It's almost death by a thousand cuts right now," Bateman, who lives in B.C., said in an interview.
"In isolation, these fees might seem reasonable, but the problem is that it's one on top of the other."
Bateman said the federal, provincial and municipal governments should be working together to ensure the taxes and fees imposed on residents are fair.
He said he's not opposed to the idea of taxes, but he said they need to be fair and the money collected should be spent responsibly.
"I don't think anyone feels really confident that governments at any level are managing our dollars efficiently and effectively, certainly not like we would manage our own wallets."
B.C.'s finance minister, Kevin Falcon, issued a statement specifically addressing health-care premiums.
Falcon defended the pending increase, insisting the Liberal government needs the money to cover rising health costs and noting premiums remained static for seven years before the first hike in 2010.
He also noted that low-income British Columbians will be eligible for assistance that will bring their rates below what they were before the increases began. Nearly one million residents receive some level of assistance or don't pay premiums at all.
"B.C. families generally have one of the lowest overall tax burdens in Canada, including income taxes, consumption taxes, property taxes, health care premiums and payroll taxes," said Falcon.
Middle class hit
Opposition NDP finance critic Bruce Ralston said the health-care premiums are problematic because all residents who don't receive assistance pay the same regardless of their income.
That means a family earning more than $30,000, which is the cutoff for assistance, pays the same health-care fees as a family earning $100,000.
"The approach that the Liberals have taken is basically to increase user fees on the broad middle class," said Ralston.
"There's no recognition of paying more as your income goes up, so you pay more as a proportion of your income in the middle class as you would in the top end."
Helmut Pastrick, chief economist with Central 1 Credit Union, said taxes and fees in B.C. appear to be increasing faster than incomes, but he said it's a complicated balancing act between keeping taxes low and ensuring government services are properly funded.
"Individually, those increases are certainly above the rate of inflation — average incomes probably won't be rising by six per cent," Pastrick said in an interview.
"They reduce disposable income, so that could present some drag on other spending. However, services are provided for that money and those services have a value. In the total budget of a household, MSP [health premiums] going up, carbon tax going up — how much is that going to account for?"