British Columbia·Analysis

Eliminating the PST an election risk the B.C. Liberals needed to take

Andrew Wilkinson's hand-waving of the details underscored the broader reason why the B.C. Liberals decided to unveil a big populist proposal at the start of the second week of this campaign: it energizes the party and helps sets the terms of debate.

Many questions remain. But the previous policy differences were playing into the NDP's hands

Liberal Leader Andrew Wilkinson removes his face mask before speaking during a campaign stop in Vancouver, on Saturday, September 26, 2020. (THE CANADIAN PRESS/Darryl Dyck)

The most salient thing B.C. Liberal Leader Andrew Wilkinson said when promising the provincial sales tax would disappear for a year if he became premier wasn't about its benefits or its costs. 

It was about the policy's lack of specifics. 

"This is not a time to worry about the details," Wilkinson said when asked what his plan was for making up the lost revenue gained by the PST, approximately $7 billion last year.

There was no detailed analysis of the effect on the economy and no explanation of where it would fit in with the budget — the only promise was the government wouldn't reduce spending in the health and education ministries. 

One might argue that a provincial election is the perfect time for details. After all, it's how people make comparisons between the political parties and decide who they want to lead them for the next four years. 

But Wilkinson's hand-waving of the details underscored the broader reason why the B.C. Liberals decided to unveil a big populist proposal at the start of the second week of this campaign: it energizes the party and helps sets the terms of debate.

Which is something the Liberals very much need if they hope to prevent a second NDP term. 

Shakes up the campaign

Prior to Wilkinson's announcement, the differences in fiscal policy could be summarized as "the Liberals were against the new taxes the NDP put in place, and the NDP weren't looking at adding any more."

It's true that the NDP added plenty of taxes in their three years in power: on homes and businesses and high earners, to name a few.    

The problem was, that dynamic didn't appear to be benefiting the Liberals. Polls showed a clear majority of British Columbians supported the speculation and school taxes, and Wilkinson's years-long criticism of the employers' health tax (which replaced MSP premiums) didn't seem to be galvanizing the public.  

With the NDP leading in current polls, a new tax policy was needed — unless Wilkinson wanted to spend the rest of the campaign responding to NDP claims he was only interested in giving money to "the wealthy and the well-connected," as the party has put it. 

Wilkinson's PST policy fits the bill: it's a broad-based measure that saves the poor a greater percentage of their income than the rich, with exemptions keeping the tax in place for unpopular consumer activities like vaping and buying luxury vehicles. 

Smart short-term politics, in other words. But is it smart long-term policy?

Split assessment 

Well, it's an election campaign: a spokesperson for the right-leaning Canadian Taxpayers Federation applauded the move and said it kept more money in the pockets of people, while an analyst with the left-leaning Canadian Centre for Policy Alternatives argued that direct deficit spending would be a more efficient way to stimulate the economy. 

No surprises there. But the immediate reaction from the general public seemed to be split as well.

"As a small business owner, it made sense to cut this tax, because it adds a lot onto your purchases on a daily basis … right now everyone's really suffering" said Lisa Fleischer, who runs a Delta clothing store.

"In reality, this is not going to help the people who are low or middle income, because the majority of spending they have to do … is already PST exempt. This is going to help the rich and the wealthy," countered Kevin Schwantje, a New West tech worker. 

Of course, none of this answers the question of how big a deficit the B.C. Liberals would be willing to take on, or if they might eventually cut ministries outside of health and education to offset the loss in revenues from a tax cut — as they did the last time they took government in 2001. 

If Wilkinson wins, it's one of many details to be sorted out as the province looks to make its way through the middle stage of a global pandemic. 

And if Wilkinson loses, it's unlikely he'll be around long enough as opposition leader to pitch a new plan. 

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