Students sometimes get failing grades, but you don’t often see three eminent professors get flunked on term papers twice in a row.
That’s what happened when the Medical Services Plan task force handed in its final paper on how to eliminate MSP premiums and replace the lost revenue.
The three members got the assignment last November and sent in an interim report in February. It was overtaken by the provincial budget a few weeks later, through no fault of theirs. That budget ignored the thrust of their advice, which was: Do it in one fell swoop and spread the impact of the replacement taxes around.
The three had their assignment changed to dealing with leftover items, given that the main decision was already made.
The final report was filed in March, then released publicly last Thursday. Within hours, most of the concepts looked to be dead on arrival.
That’s two papers in two months, one of them mostly ignored, the other apparently getting the same treatment.
Finance Minister Carole James is a tough marker.
Here are some of the ideas they pitched in the second take, with my interpretation of the government’s corresponding private reactions.
• Tax sugary drinks (more complicated than it sounds)
• Eliminate the homeowner grant (are you serious?)
• Change the provincial sales tax to a value-added tax (this has shades of the harmonized sales tax, which went down in flames several years ago, taking a premier with it. Say no more.)
James herself was publicly circumspect about the report, just thanking the three professors for their time, which clocked in around $1,000 an hour. Maybe it was professional courtesy extended to the former finance minister, Paul Ramsey, also a retired University of Northern B.C. professor, who was one of the authors.
NDP finance ministers must have some kind of code about being nice to predecessors, no matter how dismissive they are of their ideas. The other two task-force members were Lindsay Tedds from the University of Victoria and David Duff from UBC.
The ministry is quietly letting it be known most of the ideas are non-starters.
One other idea was not dismissed. The NDP goal of raising the minimum wage to $15 over the next three years could actually penalize some workers at that level, if a non-refundable tax credit isn’t adjusted. The ministry might give that a serious look, although raising the credit isn’t likely to happen soon.
The over-arching reason the task force’s final report is mostly going nowhere is that the one-year-old NDP government has started enough tax arguments as it is. It doesn’t need any more.
And eliminating that 60-year-old magical subtraction of $570 or more off most property-tax bills would start an inferno. (The homeowner grant is still under study internally, but with a view to refining it, not killing it.)
The task force fleshed out the elimination idea with an alternative. It suggested a combined refundable tax credit, funded by the sugary drinks, that would roll other credits into one and would go to homeowners and renters on a graduated scale of income.
“The credit could be named the Dogwood Benefit,” they suggested.
The official provincial flower will bloom many more seasons before it gets this idea named in its honour. Because cutting the homeowner grant would be toxic, given the current uproar about the various housing-tax moves already in the works.
The failing grades aren’t all the task force’s fault.
The task force’s entire short-lived life was confusing and contradictory. It seemed like a good idea at the time.
James said at the outset that “engaging respected experts in economics, law and public policy will ensure the path we take is fiscally responsible, fair and evidence-based.”
But the MSP decision was well in hand by the time the professors started writing and was a done deal by the time the interim report arrived.
It should have been abandoned then and there.
But James told them to tinker with other tax ideas, just as the unrest over the taxes she’d just introduced started to boil.
There’s a lot of deep thinking in the report about tax policy. But it’s an acutely sensitive topic now, and getting more so every day.
