I supported this budget; however, it’s time for B.C. to be forward-looking — to embrace innovation, to stop trying to solve 21st century challenges with 20th century approaches, and to create a new story for our province. Our potential lies in our extraordinarily beautiful and bountiful land, our people, and our diverse, caring and connected communities.
Congratulations to the government on their first full budget. There is much to be proud of this week. I’d like to recognize the Minister of Finance and the Minister of State for Child Care, in particular, as I know they’ve been working tirelessly these past many months to pull everything together.
The budget takes a number of steps on a variety of important files. Some, like the billion-dollar investment in child care and early childhood education, are huge. Others, like the new housing initiatives, are more cautious. And others, like investments in K-to-12 public education and climate change initiatives, are still lacking.
Noting that many of the members from the official opposition are using their platform to drag out the tired “all taxes are bad” narrative from the 1980s, I’m going to look to our future and try to articulate ways in which government may be able to do better going forward, as compared to Budget 2018. To do this, we have to take a brief detour back in history to identify some of the main forces that have shaped where we are now and how we got here.
Coming out of the Second World War, there was a strong, growing sentiment that the role of government was to look after people. The world had been through the Great Depression and two world wars in one generation. There was a huge surge in labour and social democratic political parties who followed Keynesian principles that promoted the use of government spending to stimulate the economy.
This philosophy guided government policies for most of the 1950s and ’60s while economies in the western world expanded. In the 1970s, as people became more affluent and debt became more available with the introduction of credit, consumerism began to rise. The increase in demand for goods was not accompanied by an equivalent increase in supply, and high levels of inflation ensued.
By the end of the 1970s, inflation was chronic and public unrest grew. There was a strong public opinion that there needed to be an adjustment, because inflation was out of control. A debate on how to fix these growing problems ensued between the monetarists and the Keynesians. Monetarists, or the Chicago school economists, led by Milton Friedman, believed that the economy could be controlled by manipulating the money supply, versus the Keynesian counter-cyclical fiscal policies that focused on demand management, policies which often took effect after an economic problem had set in.
Margaret Thatcher was the first major global leader elected on a pro-business, monetarist platform in 1979. Her model became what we now call neo-liberalism. Ronald Reagan, in the U.S.A., and Brian Mulroney, in Canada, followed her in 1981 and 1984, respectively. The backlash to the inflation and economic stagnation, termed “stagflation,” of the 1970s became deeply entrenched across the western world.
The monetarist policies of these political leaders were effective at getting the interest rates down and inflation under control, but came with a pro-business and anti–social safety net price. Taxes and government spending were kept low, and there was a systematic deregulation and decreased spending on enforcement.
The economy continued growing through the 1990s and into the early 2000s, but affordability challenges simultaneously began to take root with devastating impacts, which we are reckoning with in Budget 2018.
B.C. is now the worst-performing economy in Canada for younger generations. Compared to 1976 levels adjusted for inflation, the cost of an average house is up nearly $500,000. Not only are wages not up $500,000; they are down $9,000. I would encourage everyone in this chamber who was old enough to buy a home in the late 1970s and early 1980s to think about how their life would be different had their home cost half a million dollars more and their income been $9,000 less. How would that have impacted the course of your life?
To reference data from Generation Squeeze, an organization which has grown out of Dr. Paul Kershaw’s lab in UBC’s School of Population and Public Health, B.C. has lost control of home prices more than any other province. It took five years of full-time work to save a 20 percent down payment on an average home from 1976 to 1980. From 1991 to 2001, it took seven to eight years to save the down payment. Over the last government’s term, from 2001 to 2017, it rose from eight years to 20. Twenty years of working in a good job to be able to save a 20 percent down payment for an average-priced home in B.C.
On top of that, good-paying jobs are harder to secure. Full-time earnings have fallen more in B.C. than in any other province, since 1976 to 1980. While Statistics Canada data indicate that the average five-year mortgage rates have fallen from a high of 10 to 13 percent between 1976 and 1980 to a low of 3.76 to 4.38 percent from 2011 to 2016, today’s higher home prices negate any benefit this may have brought to young British Columbians. Despite much more favourable borrowing rates, the typical 25-to-34-year-old in B.C. must devote more than eight months of their full-time work year to cover mortgage costs on an average-priced home in B.C. That’s an extra three months of their paid work each year to cover annual mortgage costs compared to the same-aged Canadian in the 1970s.
Young citizens must increasingly come to terms with renting for longer periods, if not indefinitely, and personal debt is on the rise. Again, to quote Dr. Kershaw’s data, since 2001, university tuition rose more than in any other province, and today the average amount of debt held by British Columbians under 35 is $40,000. Why do we hear so much about how B.C. has the fastest-growing economy when it is the worst-performing economy in Canada for young people? It’s because the real estate sector is propping up our GDP, which is a problematic measurement to begin with.
Using 2015 figures, mining, quarrying, and oil and gas extraction combined account for 5 percent of B.C.’s economy; educational services are 5.5 percent; public administration is 5.5 percent; transportation and warehousing, nearly 6 percent; professional scientific and technical services, 6 percent; retail, 6.5 percent; health care and social assistance, 6.5 percent; manufacturing, 7 percent; and construction, 8.5 percent.
Real estate, rental and leasing — today they account for 20 percent of our province’s entire economy. But while escalating home prices that have driven B.C.’s economic growth since 2001, they have not grown employment opportunities at a corresponding pace. Real estate accounts for 20 percent of our economy but only 2 to 3 percent of our jobs.
Budget 2018 certainly makes some great affordability adjustments, but it is operating within the same neo-liberal framework. The governing principles from the last 30 years have taken us to a very unhealthy place.
The “taxation is bad; consumerism is good” story will not save us. Let’s remember that the system is perfectly designed for the outcomes that you are getting. When used properly, the taxation system can be a tool for achieving goals in the public interest. Together we need to draw a new map for where B.C. is going.
Part of that narrative must be a broader analysis of our economy and how it is serving British Columbians. Gross domestic product measures our province’s economic activity. It does not account for economic or social well-being. The devastating fires that we had last year, for example, will be counted as an increase in GDP, because we had to spend $750 million to fight them. Are we better off as a province because of those fires and that money spent? I don’t think so.
We cannot hold GDP as the sole measure of success. Even treating it as an indicator of general well-being is inaccurate and dangerous. GDP measurement encourages the depletion of natural resources faster than they can renew themselves and conceals a growing disparity between the haves and the have-nots. We are using an antiquated tool that never really did represent health, well-being or intergenerational equity to measure how we’re doing. It is a backward-looking tool, and we need to be forward-looking.
It is time that we asked instead: what kind of growth are we achieving and at what cost to our environment and our communities? Today the answers to those questions are not positive. The growth we are achieving is collecting as incredible wealth for the lucky few, while certain groups of people are consigned to a life of disadvantage and suffering.
In B.C., the most affluent 10 percent of the population holds 56 percent of the wealth. At the same time, 3 percent of the wealth is shared amongst 50 percent of our population. Think about that: 50 percent of the people of B.C. — close to 2½ million people — hold only 3 percent of the wealth in this province.
The narrative that we just need to have people willing to work hard does not hold water when 50 percent of the citizens have to find a way to make 3 percent of the wealth work between them. None in this province work harder than the people who are struggling to make ends meet every day — sometimes working two or three jobs, juggling the demands of life and seeing costs steadily rise while their incomes remain stagnant.
Working harder or getting a job is not the solution. The vast majority of people in B.C. who are living in poverty are working, but the jobs do not provide the income necessary to be able to make ends meet — let alone to thrive.
The cost to our environment is immense by the consequences, which will largely be borne by our children and grandchildren. The Intergovernmental Panel on Climate Change reports that greenhouse gas emissions must be reduced well below 1.5 tonnes per person in order to avoid severe damage to the security of the climate for today’s younger generations and their children. Instead, the average Canadian is producing 21 tonnes of greenhouse gases — more than 13 times the level considered to be sustainable.
This means the model of economic growth that is undermining the financial standard of living for younger Canadians is also compromising the climate, air, water and soil conditions on which younger Canadians depend.
People cannot make the necessary changes on their own. They need our help and leadership. We need to build a system that internalizes externalities through life-cycle accounting. We need to stop treating people as externalities and consider ecological economics.
How can we live within our means and elevate the health and well-being of our fellow British Columbians? How can we live within the very finite carrying capacity of the Earth? We need to refocus on quality of life. Everything has been focused on quantity — the frantic pursuit of excess. Consumerism has not brought us happiness. Instead, it has come at an incredible cost to our environment and our communities.
Beyond the cruelty of it, there is a real cost to keeping people down — $1.2 billion a year in B.C., in fact. As the B.C. Poverty Reduction Coalition says: “Inequality negatively impacts physical and mental health, education outcomes, trust and community life, homicide rates, children’s health and well-being, drug abuse and more. As a result, more equal societies have far fewer health and societal problems.”
Poverty is a fundamental determinant of both physical and mental health. This isn’t surprising, given that living in poverty means that you are more likely to live in cold, damp or unsafe housing. You are also more likely to suffer illness, have a chronic health condition and die earlier.
A significant cause of these health problems is a lack of food. B.C. is facing a chronic hunger problem and significant food insecurity. After paying for rent, heat and electricity, people with low incomes have little money leftover for food, so they are less likely to eat fruit, vegetables, milk products and other food that provides the nutrients they need for good health.
Addressing long-term health issues associated with poverty adds a cost of $1.2 billion per year. In other words, our public health care system could save $1.2 billion a year if poverty reduction initiatives reduced health care costs of the poorest 20 percent of British Columbians by raising their incomes. By not taking action on poverty reduction, our health care system is overburdened, and we all face the consequences of long wait times; overworked doctors, nurses and medical staff; and unsafe hospitals.
“There are measures to tackle the breadth of poverty in B.C. through investments in the 2018 B.C. budget, but there is little to tackle the depth of poverty,” Poverty Reduction Coalition said this week. I agree. This budget is a step in the right direction. Action on housing and child care will help the economy and make communities healthier, and it doesn’t preclude larger systematic changes we will need to make. But we need to keep working on it.
How do you get a system that internalizes environmental and societal externalities, that prioritizes baseline health and well-being for all? As opposition members, we can start to facilitate these conversations. To start, I believe we need to refocus on government’s three main purposes.
First, the role of government should be to facilitate the highest and best outcomes for the health and well-being of current and future generations of British Columbians. According to the social determinants of health, 60 percent of illness is caused by economic, social and environmental factors, with income as the number one factor.
If government is going to achieve the highest and best outcomes for health and well-being, the social determinants of health, especially liveable income, must be addressed. Our goal should be to ensure that all people have economic security. This will also have the effect of reducing the burdens on government spending — particularly in health, which is the greatest percentage of our budget.
Secondly, government must sustainably manage our province in the interests of intergenerational equity. The original concept of sustainability: meeting the needs of the present without compromising the ability of future generations to meet their own needs.
I note those future generations are sitting up in our gallery right now, and it is to them who we owe a debt.
Sustainable management is essential if our land, air, and water are to support life as we know it, now and for years to come. That does not mean that we must pit the environment against the economy. Rather, with innovation and inspiration, we can profit from our clean environment, while diminishing the threat to economic and social stability from global warming and environmental degradation. Our goal should be to sustainably manage our province for the benefit of all British Columbians, including future generations.
Thirdly, government should be the steward of public resources and manage the delivery of public goods and services on behalf of the people as important assets owned by everyone.
We need to reset the relationship between people and their elected representatives. Governments are people elected by people to look after the best interests of all people in the province. Public goods and services belong to us. They are part of our personal wealth. It is our duty to take a direct interest in ensuring these assets are well managed and maintained on our behalf.
The quality of our public infrastructure — our public transportation, our hospitals, our schools — and the availability and excellence of services, such as those provided by our mental health nurses, our teachers, our peace officers and our social workers, enhance the livability and pride in our communities.
Neoliberal 20th-century politicians have portrayed governments as a burden that weighs down citizens with taxes and regulations, often irresponsibly spending their money on schools, roads and hospitals. They have persuaded people to give up their ownership of public assets — such as parks, public transportation, Crown land, hospitals and schools — and to look down on public servants. They have destroyed community, glorified a brash individualism and disparaged those concerned for communal well-being and future generations.
The way society works is created by all of us, and when systems don’t work or stories don’t make sense, we can and must change them. Increasingly, research is showing that connection and community are what truly underpin our health and well-being.
An article in yesterday’s Guardian newspaper reinforces this with a story about the town of Frome in Somerset, England. A GP, in response to her patients’ concerns, created the compassionate Frome project, which set up a directory of agencies and community groups. This let them see where the gaps were, which they then filled with new groups for people with particular conditions. They employed health connecters to help people plan their care and, most interestingly, trained voluntary community connecters to help their patients find the support they needed.
The outcome? While hospital visits across the U.K. have risen by 29 percent over three years, in Frome, visits have decreased by 19 percent. That’s 38 percent fewer hospital visits in a town that made connection and community a priority. These are the stories that we need to be paying attention to.
I will be supporting this budget. But I will also say it’s time for B.C. to be forward-looking — to embrace innovation, to stop trying to solve 21st century challenges with 20th century approaches, and to create a new story for our province. Our potential lies in our extraordinarily beautiful and bountiful land, our people, and our diverse, caring and connected communities.