When something changes from one week to the next for no apparent reason, it sparks some curiosity, as is the case with the B.C. Finance Ministry’s “Keeping taxes low for B.C. families” fact sheet posted to its website only a week after the provincial budget.
It favours spin right from the top. The first two lines are classic.
“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.”
In certain circles, that’s called the bait.
The second: “B.C. currently has the lowest provincial personal income taxes in Canada for individuals earning up to $122,000 a year.”
And that’s called the switch.
It goes on to boast that “a single individual can earn more than $19,000 before paying provincial income taxes.” Bet that line wasn’t written by someone earning $19,000.
A two-bedroom apartment rents for an average of $1,571 a month in Vancouver. Presuming someone earning $19,000 a year chose to share an apartment, their annual rent would be $9,426, leaving them about $182 a week for incidentals such as federal-source deductions, utilities, clothes, transportation and food.
And the ministry has the chutzpah to brag about not charging income taxes on a salary of $19,000.
What really jumps out? The four spanking new illustrations. The ones that point out that an individual earning $20,000 a year pays $693 less in provincial income taxes than they did in 2001, a senior couple earning $40,000 pays $774 less, an individual earning $50,000 pays $1,334 less, and a family of four earning $70,000 a year pays $2,027 less.
It’s puzzling why the ministry thought there was a need to come up with new ones, since they tabled six perfectly good scenarios the week before with the budget.
Perhaps the new ones paint a rosier picture? Or maybe it’s because they don’t come with those pesky numbers from other provinces where folk might notice that British Columbians pay taxes that aren’t levied elsewhere?
It also makes one wonder what the numbers might look like if the goalposts were moved ever so slightly and the starting point was, say, 2002 and not 2001 (a year undoubtedly chosen out of thin air) and used the budget scenarios instead.
There can’t be any harm in comparing trends with other provinces, can there? Just as no man is an island, no province is a fiscal island.
In two of the budget’s six scenarios, total provincial taxes went up between 2002 and 2014: by $717 for a two-income family of four earning $90,000 and $276 for a two-income family earning $60,000.
An individual earning $25,000 saw taxes drop, as they would have in every province. B.C. lost ground, dropping to third-lowest among the provinces.
A two-income family earning $30,000 saw their taxes fall by 7.6 per cent. They fell in six other provinces, too, including by 39.9 per cent in Alberta and 44.6 per cent in Ontario. B.C. lost ground again, going from second lowest to fourth.
For an individual earning $80,000 — or nearly $50,000 more than the median income for an individual in B.C. — their taxes dropped by 14 per cent. B.C. picked up ground, improving from second-lowest to lowest.
And it can’t hurt to take a peek at how B.C. stacks up in another province’s analysis, strictly as a check on political self-interest.
The Saskatchewan government has its annual intercity comparison of taxes that looks at one city from each province. Figures are readily available online from 2008 on.
An individual earning $25,000 saw taxes drop in all 10 cities between 2008 and 2014. In Vancouver by $301. In the other nine? By an average of $523.
For a family earning $50,000, taxes dropped in seven cities and rose in three. Vancouver had the highest increase of the three. A family earning $75,000 saw their taxes drop in seven cities. Vancouver? Second-highest increase.
B.C. might very well have some of the lowest personal income tax rates in Canada, but that doesn’t mean the lowest tax bill. So doing that “lowest personal income tax” thing is a cute trick, but at the end of the day, it’s a trick. And not a particularly empathetic one.
Dermod Travis is the executive director of IntegrityBC.
