British Columbia·Fact Check

B.C. NDP campaign ad claim gets failing grade for 'false fact'

In a 2017 election ad, the B.C. New Democrats claim Christy Clark's Liberal party has given a one billion dollar tax break to the province's richest two percent. But where does that number come from? And is it accurate? We 'fact check' the claim with a public policy analyst from SFU.

Expert says statement about $1B tax break for the rich uses ‘creative accounting'

In NDP campaign ad, party leader John Horgan claims B.C. Liberals have given a billion dollar tax cut to the rich. (B.C. NDP)

In a widely-distributed B.C. NDP election ad, party leader John Horgan strolls through what appears to be an exclusive neighbourhood, mansions just out of view.

"Christy Clark gave the richest two per cent a billion-dollar tax break," he tells the camera in the spot, currently running on television and social media.

"Meanwhile," he adds, "the rest of us are paying $1,000 more each year. Think about it: she's taking from you and giving to them."

But do those statements bear up to a CBC fact check?

We put the NDP's claims to a public finance expert at Simon Fraser University (SFU).

The verdict: the professor took serious issue with the first statement, but agreed with the second.

'A false fact'

"Their first claim about the tax break of $1 billion for the rich — that is, people (earning) over $150,000 — really doesn't have a passing mark. It does funny things with the math," said J. Rhys Kesselman, who works with SFU's School of Public Policy.

The expert went on to say the claim was an "outright fail or 'false fact.'"

Professor J. Rhys Kesselman of SFU's school of public policy gave a failing grade to a B.C. NDP claim. (Mike Zimmer, CBC)

The problem, according to Kesselman, is that the NDP used "creative accounting" and "fudgy" arithmetic to arrive at the $1 billion figure.

So, where could that number have come from?

Back in 2014, the B.C. Liberals brought in higher taxes for top income earners.

The tax bracket for those earning more than $150,000 per year generated $250 million for the provincial government in 2014 and 2015 — but it was a temporary measure that expired, as scheduled, in 2016.

On Tuesday, the B.C. NDP told CBC News that the claim about "a billion-dollar tax break" for the rich assumes that, if the tax hadn't been eliminated, $250 million would have continued to roll in year after year. 

If you multiply that by the standard four-year government term, you end up with $1 billion in revenue from the tax breaks.

Kesselman said that's "a nice large number," but feels it's a bit of a construct based on a tax hike that was killed, rather than a tax cut that was implemented for good.

"It was clear that [the levy] was not permanent," the expert said. "To stretch that times four years [since] it was only in place two years, that seems like a real stretch in terms of a claim."

To complicate matters, Horgan's next line in the political ad refers to annual costs, possibly creating the impression the $1-billion tax cut claim is also a yearly figure, rather than one that accumulated over four years.

'We totally stand by' ad: B.C. NDP

The NDP is sticking by its message.

"We totally stand by these figures" said Glen Sanford, the party's deputy campaign director. "[They're] totally fine. What we are saying is that the very wealthiest got a billion-dollar tax break."

Sanford said he wasn't involved in the making of the party's campaign ads, which were done internally.

Asked if the ad should have been clearer, Sanford said he thinks it's a "very fair breakdown" of the numbers.

"What we are comparing is priorities, and who benefits under a Christy Clark government. What we're saying is the top two per cent have done well by her, while everyone else is paying the price."

Second claim gets an 'A'

Time frames aside, is the second claim about "the rest of us paying $1,000 more each year" correct?

Kesselman said he likes that statement a lot better than the first one.

"The second one is right on — maybe even an 'A,'" the expert says.

"The average family at moderate and middle incomes — and even higher incomes — has been socked for an extra thousand [dollars] a year due to ICBC hikes, BC Hydro hikes and medical services plan hikes ... and that's really the most regressive way to get revenues for the government."

As for his assessment on the NDP's "creative accounting," Kesselman shrugged.

"My level of expectation from political campaigns, [after] surviving the American [presidential] campaign, is so low. But you know, this is not Trump-level lying — this is sort of within the range of normal."

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ABOUT THE AUTHOR

Eric Rankin

Investigative journalist

Eric Rankin is an award-winning CBC reporter. His honours include the 2018 Canadian Screen Award for Best Local Reportage, the 2017 and 2015 RTDNA awards for Best In-depth/Investigative Reporting, and the 2009 Jack Webster award for Best News Reporting.

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