NDP calls Campbell's tax cut desperate

B.C. Premier Gordon Campbell took to the airwaves to defend his announced tax cut, which the Opposition NDP is calling a move of desperation.
Premier Gordon Campbell used a $240,000 prime-time television spot to announce a 15 per cent provincial income tax cut on Wednesday evening. (CBC) ((CBC))

B.C. Premier Gordon Campbell took to the airwaves on Wednesday night to defend the HST and promise a tax cut that will leave hundreds of dollars more in taxpayers' pockets, but the NDP Opposition is calling it a desperate move.

"I'm pleased to announce tonight that effective Jan. 1, 2011, there will be a 15 per cent reduction in the tax rates on all of your income up to $72,000," said Campbell.

"That will help B.C.'s middle income families. In fact, it will help 1.9 million British Columbia taxpayers. By leaving more money in your pockets, you will have the choices you want," he said.

Campbell says it means British Columbians with low and middle incomes will pay the lowest taxes in Canada.

"By leaving more money in your pockets you'll have the choices you want," he said.

The premier also told CBC News on Thursday morning that the total bill for the half-hour television broadcast on BCTV cost the government nearly $250,.000.

"I think it was about…$240,000 in total, all the advertising, everything around it and the half hour," said Campbell.

Desperate move, says NDP

But B.C. NDP Opposition leader Carole James described Campbell's address as desperate and said his promise of a 15 per cent tax was irresponsible.

"It's a reckless way to do tax policy. This is a Premier who has said for the last two years that we have to tighten our belts. He's cut education, he's cut support for seniors, and now he tells us that he can find $600 million. He's gonna give a tax break? It's ridiculous. We don't know what impact that will have on the budget," she said.

James said the evening address was a failed attempt by Campbell to revive the sagging popularity of the B.C. Liberals.

"The premier seems to forget that the biggest problem he's got is that the public doesn't trust him, and they don't trust his government to put a tax cut in place, without recognizing that it's going to mean program cuts or taking money from your pocket in fees and services," said James.

While the tax cut might have been an effort to blunt the negative political effect of the HST, the harmonized tax still undermines the impact of the income tax reduction for many in B.C.

In a two-income household where both people are earning just over $50,000 a year, the total income tax savings will be $708. But a recent report by Statistics Canada found the same family is spending an extra $1,128 a year due to the HST alone. That calculation does not take into account the negative impact from other provincial increases like the carbon tax and a Medical Services Plan premium increase of six per cent.

Anti-HST campaigner Chris Delaney said the premier should have used the address to cancel the tax or resign.

Delaney also said the tax cut should have been brought up in the legislature first, and questioned whether it would make a difference for those paying the HST.

"When you do break it down, you realize that the income tax cut adds up to $568 million for the year. Well, one per cent of HST is $800 million, so that's about three-quarters of a per cent of the HST," said Delaney.

Looked presidential, says pollster

Meanwhile, a leading economist described the tax cut as modest compared with those in Campbell's first year in office. But Helmut Pastrick of the Central One Credit Union said it should have a favourable impact on the investment climate.

"Lower taxes are usually viewed as beneficial for businesses, consumers as well, but also for the overall investment climate. I think this will be positively received by the investment community," he said.

Pastrick says low to middle income earners will be the main beneficiaries of the tax cut.

Mario Canseco, the vice-president of communications with the polling firm Angus Reid Public Opinion, said the premier was trying to sell himself as somebody who can be trusted and, overall, Campbell did a good job of repositioning himself as the leader of the province.

"It's a nice setting for him. He looked, as the Americans would say, presidential," said Canseco.

Aside from the HST and tax cuts, Campbell spent much of the address talking about health care and education, and Canseco sees that as an attempt to undercut the NDP.

"He knows that the NDP is incredibly popular right now, almost 50 per cent in the surveys. He's trying to connect with causes that the NDP cares about," said Canseco.

Education promise missed the boat

The premier also outlined plans to expand early childhood education and pledged that within five years all Grade 4 students in B.C. will be able to read, write and do math at a Grade 4 level.

But the president of the B.C. Teachers' Federation, Susan Lambert, said Campbell missed the boat.

"When we talk about grade level we are actually talking about an artificial average. No child is average. Every child is unique. The statement is meaningless. It shows the premier doesn't understand how children learn," said Lambert.

Lambert said Campbell should focus on making class sizes smaller, and hire more support teachers.

Despite predictions Campbell might announce a cut to the HST, the premier didn't budge on the unpopular tax, saying it will remain in place at least until the provincewide referendum in September.

Campbell asked all British Columbians to "think like a finance minister" when they vote in the referendum next year.