My musings on the B.C. budget.

 

Finance Minister Colin Hansen has reaffirmed his government's commitment to return to balanced budgets by 2013-14 but the documents he tabled Tuesday offered no credible plan to get there.

In fact, the British Columbia provincial budget sees continuing deficits for the next three years while total debt climbs to $55.9 billion. The government is counting on rising revenue to offset increased spending. However, its revenue projections depend on an optimistic outlook for the B.C. economy that is fraught with uncertainty. The finance department sees growth of real gross domestic product of 2.2 per cent in 2010, 2.3 per cent in 2011, 2.7 in 2012 and 2.8 per cent in both 2013 and 2014. Factor in inflation and nominal GDP will grow by a robust 4.5 per cent, 4.7 per cent, 5.0 per cent, 4.9 per cent and 4.8 per cent in those years.

The risk to these bullish assumptions, which the budget acknowledges, include a double-dip recession in the United States (the destination for about 55 per cent of B.C. exports), slower than anticipated global demand for B.C. goods, disruption of global financial and commodity markets caused by further weakening of the U.S. dollar and appreciation of the Canadian dollar, which some forecasters believe could reach parity with the U.S. dollar or higher, severely depressing demand for all Canadian exports.

Government revenue is forecast to grow to $42.8 billion by 2012-13 from $37 billion this year and its single largest component is personal income tax, which increases to $6.5 billion from $5.5 billion.

The property transfer tax is expected to contribute $1.1 billion by 2012-13, up from $855 million this year.

If the government's revenue projections are realized, it may indeed balance spending, which will increase to $42.5 billion from $39.7 billion, by the end of the budget plan.

That still leaves B.C. with record debt, which increases by $6.4 billion next year, by $4.6 billion in 2011-12 and by $3.5 billion in 2012-13.

But Hansen assured reporters that B.C.'s debt is manageable at 17.9 per cent of GDP, and even though it has gone up, it remains below the 2003 level of 21 per cent and remains within the comfort range of the debt rating agencies, posing no threat to B.C. Triple A credit rating. Of course, he was talking about taxpayer-supported debt, which excludes Crown corporations and self-supporting agencies. Total provincial debt will rise to 25.9 per cent of GDP and amount to 100.9 per cent of revenue by 2012-13. By then, interest on the debt will account for 5.3 cents of every $1 of revenue. Debt servicing costs will increase by $742 million to $2.9 billion. Each British Columbian's share of the debt will be $12,000.

Hansen seems at ease with all of this, maintaining that the increase in spending is due, in large part, to $5.3 billion worth of accelerated capital projects -- for schools, roads, hospitals and transportation -- that would have had to be done eventually. Besides, he added, the B.C. economy will perform better than other jurisdictions in North America, whether or not there is a double-dip in the U.S.

For Hansen, frugality is slowing the rate of spending growth, not cutting spending. There's $2.2 billion more for health care, $2.7 billion for transportation and modest increases for education and social services. There's also a new $60-million program for sports and arts, $100 million for clean energy technologies, and an additional $35 million for LiveSmart BC, which provides grants for energy audits and energy-saving retrofits.

Although there are 50 tax measures itemized in the budget, few have a significant impact on taxpayers; many are transitional adjustments to accommodate the Harmonized Sales Tax in July. But cigar smokers are singled out: The maximum tax payable on a cigar rises from $5 to $6.

There's every reason to be wary of the government's ability to balance the books. Consider the illustration of financial wizardry provided by the carbon tax. Over the next three years, revenue from the tax is forecast at $727 million, $928 million and $1.1 billion. After mitigation measures, the loss of revenue in each of the years is $69 million, $67 million and $123 million. The carbon tax was supposed to be revenue neutral, not a money loser. It is interesting to note that demand for fossil fuels has increased at a faster pace in B.C. since the carbon tax was introduced than in any jurisdiction in Canada.

One of the rare bright spots in the budget is recognition that a reduction in public service staffing will likely be necessary to balance the budget by 2013-14. Another plus: There no funding for public service wage increases as the government maintains its net-zero cost mandate in collective bargaining.

Unfortunately, these examples provide the only evidence that the government is serious about cutting costs. Instead, it has placed all of its faith in economic growth to lift revenues, hoping against hope that they will rise high enough, fast enough, to match its ever-increasing spending.

For better or worse, this week’s full moon will have a powerful and lasting effect.

                                    

WARNING: There has been a pirate sighting in Stanley Park.

Apparently visitors riding the annual ‘Ghost Train' not only spotted these heathen sea bullies, but they were spooked by the sword fighting, rum guzzling, blood thirsty lot!

 

  Every year around Halloween Stanley Park hosts a haunted outdoor event such as this. All ages are welcome to take a ride on the train at sundown as it weaves in and out of the ancient rain forest bringing you through a spooky world of real live pirates acting out gruesome scenes.

  

As you ride the train, music from the Pirates of the Caribbean and other themes play over head and actors from Vancouver theatre group ,Mortal Coil , act out realistic scenes of sword fights, eerie death scenes, and headless comedy bits. We covered the eyes of our little one through some of it as it was a bit graphic. However it was mostly artistic impressions of this hallowed eve with a terrific pirate theme.

  There is also lots of other fun stuff happening around the park with ghoulish face painting available, pirate hat making, petting zoo walk through, candle lit nature walk, food vendors and other fun stuff.

  October 10th-November 1st 6pm-10pm nightly

Tickets (2008 prices):

Adult

$9.00

Discount
(Children & Youth 2-18, Seniors 65+)

$5.50

Admission includes Children's Farmyard and Halloween Barn, open 5pm-9pm nightly

• Cash, Credit Cards and Debit Cards accepted
• Children 5 & under - Parental discretion advised
• For safety reasons, the Ghost Train may be closed on occasion due to high winds. Check the Info line at 604-257-8531 for updates.

How Do I Get There?

The Ghost Train is readily accessible by TransLink (on the #19 bus) and event parking is free after 5pm. When you enter Stanley Park off Georgia Street, go straight ahead up Pipeline Road (don't turn right under the overpass) and look for our parking attendants to guide you to available parking spots

Columnist Peter McKnight explains what Insite, a safe injection site, is and its future.

 

 

Is it contrarian to argue governments are spending too much money? Here's a little essay that makes the case.

 

It is fair to criticize the Conservative government for cutting the goods and services tax by a percentage point to five per cent last year. Many economists viewed the move as a political gimmick and argued that cuts to personal income, capital gains or corporate profits would have been more productive.

On the other hand, the GST cut did boost retail sales briefly, and it has the lowest marginal efficiency cost of any other tax.

Whether one tax cut is more effective than another is an honest and legitimate debate that serves to inform policy-making.

But claims by some commentators that the GST cuts are responsible for the federal deficit are neither honest nor legitimate. Their argument goes something like this: Given the forgone revenue as a result of the two-phased GST cut from seven per cent to five per cent -- pegged at an astounding $12 billion a year (why isn't mainstream media all over this this?) -- a deficit was inevitable and completely avoidable. And all the money from tax cuts went into the pockets of the wealthy and greedy corporations rather than into the collective good, things like national child care and environmental projects.

The mathematics of this polemic is simple.

If the GST collects $30 billion a year at a five per cent, it would amass $42 billion at seven. Voila, $12 billion lost.

Unfortunately for these commentators, the federal government is required to keep track of its revenue and expenditures using generally accepted accounting principles, not Grade 5 arithmetic.

The annual statement for the fiscal year ended March 31, 2007, reports a drop in GST revenues of $1.7 billion, reflecting the impact of the GST rate reduction to six per cent from seven per cent. The statement for the fiscal year ended March 31, 2008, shows a drop of $1.4 billion, which takes into account the two cuts July 1, 2006, and Jan. 1, 2008, to five per cent. The annual statements are made public each September so we'll have to wait a few months before we see whether the loss for a full fiscal year at five per cent reaches $12 billion. Don't bet on it.

The truth of the matter is the federal government doesn't have a revenue problem, it has a spending problem.

Indeed, government revenue grew without pause from $203.8 billion in 2004 to $256.6 billion in 2008, while expenditures grew by more than 20 per cent, or nearly twice the rate of economic growth. Some of that spending covered payroll for an expanding public service. There were 297,357 more people working in the public sector in 2008 than there were in 2004.

Ottawa is not alone in its profligacy. Over the past five years, all provincial governments increased spending beyond what was needed to compensate for inflation and population growth.

The federal deficit, and deficits racked up by provinces, are a direct result of the inability of governments to control spending.

The latest round of "stimulus" spending will not kickstart economic growth, it will become a burden that holds the promise of more debt and higher taxes down the road.

Just how much of burden was made painfully clear in a report by the economics division of the TD Bank, which estimated that a string of annual deficits over the next five years -- starting with the $50 million shortfall this year that Finance Minister Jim Flaherty has already acknowledged -- will add $170 billion to the $468-billion national debt.

Debt service accounts for eight cents of every dollar of revenue and ranks as the second-biggest expenditure after social services.

Some Canadians believe that if taxation is good, more taxation is better. The Canadian Centre for Policy Alternatives published a union-financed study, Canada's Quiet Bargain, which extolled the benefits of public spending.

It purported to prove that Canadians get a good deal "by investing in taxes" and that tax cuts have reduced Canadians' living standards.

In fact, productivity declines as the tax rate increases and productivity, more than ever as the population ages, will be the engine of economic growth and higher living standards.

We need growth to create jobs so people have income on which they pay taxes. No one will reasonably argue that the tax rate be reduced to zero per cent, nor that it be 100 per cent of income.

In both of these extreme cases, as the Laffer Curve illustrates, government tax revenue would be nothing. Governments need tax revenue to finance their activities.

A majority of Canadians believe in public health insurance, public pensions, public employment insurance and public education, and most would agree that these services contribute to the quality of life.

Nevertheless, governments have built up too much debt by paying out more than they take in.

And there are only two ways to resolve it -- raise taxes or reduce spending.

The choice seems obvious.

It’s no wonder that knee injuries are the most common affliction among skiers and snowboarders alike, and the most dreaded.

VANCOUVER, B.C. - A B.C. couple has been separated for months after its effort to adopt twin boys from Ghana turned into a bureaucratic nightmare.

Andrea Bastin, a filmmaker from Bowen Island near Vancouver, has been living in the West African country since August as she tries to convince the Canadian High Commission there that the boys' mother died giving birth.

But her effort is complicated by the fact the death certificate she first submitted turned out to be bogus, raising a red flag in a region where child trafficking is common.

Bastin and her husband, builder Michael Segal, say they've since produced the proper death certificate, along with hospital records and affidavits from the woman's family.

The couple say Ghanian officials have also told their Canadian counterparts they're satisfied the mother is dead and the twins' elderly father has given up his parental rights.

"The Ghanaian authorities are 100-per-cent behind us," Segal said in an interview.

But despite an appeal to Citizenship and Immigration Minister Jason Kenney and support from their MP, Conservative John Weston, the case remains in limbo while Bastin and the children live in the spare room of a friend's house in Accra, the capital.

The couple's odyssey began a year ago when the infants were given to the Royal Seed Home, an orphanage near Accra, by their father, a yam farmer from a village in the country's north.

Bastin and Segal were among other Bowen Islanders helping support the orphanage where a former island resident was working. They began the adoption process, which included Bastin flying to Ghana to begin fostering the boys, as required by the country's law.

In an interview from Accra, Bastin, who won a 2003 Gemini award for a short film, said she found the children malnourished and lagging in their development.

"I had really, really sick babies," she said Friday.

By fall, Ghana's Social Welfare Department had approved an interim adoption and the couple began the paperwork to bring the children to Canada. The requirement included a copy of the mother's death certificate.

That's where things went wrong.

Bastin said the twins' 24-year-old "senior brother" went to the family's village to get the document but was told he had to go to Accra. There, he paid an official to get the death certificate, which turned out to be invalid.

Bastin and Segal said they later learned the bureaucrat had no authority to issue the document, which should have come from local officials in the first place.

The invalid death certificate raised alarms at Canada's high commission in Ghana, which handles visa and immigration files from a dozen African countries. Ghana is a hub for human trafficking, including children taken out of the country.

The couple said Canadian officials refused to provide documents allowing Bastin to take the twins back to Canada until the 44-year-old mother's death was confirmed.

Both Bastin and the boys' older brother obtained copies of the genuine death certificate from officials of the village, along with hospital records confirming how she died and affidavits from relatives saying she was indeed dead.

The boys' father, who Bastin said is in his 70s, also formally gave up his parental rights.

The man, an elder in his village, visited her and the boys and cried as he gave them his blessing, saying "I'm sorry," through a translator, Bastin said.

Last month, Ghanaian social welfare officials waived a two-year temporary adoption period and granted Bastin and Segal full adoption - which was another condition Canadian immigration officials required.

Local representatives of the Geneva-based International Organization for Migration and Ghana's police have both investigated the adoption and found it to be above board, said Bastin.

"Now we've resubmitted everything in hopes that in light of the new evidence, they would reopen the case," said Segal.

He and Bastin said Weston, MP for West Vancouver-Sunshine Coast-Sea-To-Sky Country, has been a staunch advocate for the family.

The Conservative MP declined to discuss the case but Segal said he sent a letter to the Immigration Department suggesting the boys be given a temporary residence permit, landed-immigrant status or citizenship, which can be granted to adopted foreign children.

A department spokeswoman in Vancouver wouldn't discuss specifics of the case, citing privacy rules.

But Johanne Nadeau said in areas were child-trafficking takes place and where documentation is non-existent or unreliable, extra safeguards are needed.

"If there is evidence of wrongdoing in the adoption system or if there's limited infrastructure that exists to support or protect the children, we must in these cases do additional verification to ensure the best interests of the child," she said.

Even under ideal circumstances, international adoptions take six to eight months to complete, said Nadeau.

"Depending on the child's country of origin, it's not unusual for the process to last for two years or even longer," she said.

Segal said he does not blame high commission officials for their scrutiny, given the dubious death certificate and the region's reputation for human trafficking.

"They're in CYA (cover-your-ass) mode right now," he said.

But the drawn-out process has been hard on the family.

Bastin took their five-year-old son, Fin, with her to Africa last summer, expecting to stay only a few weeks. As the adoption dragged on, Segal visited them over Christmas and brought the boy home.

Fin bonded with his new brothers, she said, helping feed them and change their diapers.

"We're a family, there's no question," she said.

The ordeal has also taken an emotional toll on Bastin. While the boys, now 15 months, are beginning to thrive, she said she's witnessed the effects of extreme poverty on Ghana's children.

The global recession has hit the country's economy hard and the orphanage's population has mushroomed as more families are unable to care for their children, she said.

"I've witnessed children die for no reason," Bastin said.

If Canada does not allow her to bring the twins home, Bastin said she and her husband have discussed moving to a third country where they can all be together.

"I'm now at my wit's end," she said.

The Integrated Homicide Investigation Team is investigating the "suspicious" death of an adult male, whose body was found inside a trailer in Coquitlam.

With all eyes focused on B.C. this February, Vancouver-area Denise Relke’s hand-crafted, sports-themed silver jewellery is a must-have for anyone visiting the province this winter. This athlete-turned-jewellery maker’s story is in itself, positively Olympian!

They say that every cloud has a silver lining, and in the case of Denise Relke, this was almost quite literally true. When this avid runner’s broken ankle forced her to take it easy, she filled some of her newly-found spare time with a silversmithing night class – and fell in love with the art form. In true marathoner fashion, she focused on the long recovery road ahead, and to remind herself that she would once again run, she used her newly found skills to fashion a unique running-themed pendant…and quickly garnered herself some fans within her running group.

One thing led to another and she was soon crafting bespoke designs for some of her running circle. As Sporty Jewels’ reputation grew, so did the assortment of jewellery she designed, and soon she was embracing a multitude of sports and an ever-growing group of sports enthusiasts as fans.

Denise explains, “I decided I wanted to create some jewellery that would represent the passion of sport. At first it was just for me but now I’m thrilled to share my designs with everyone from the recreational sports fan to the Olympic level athlete. We think everyone deserves to celebrate their accomplishments with some jewellery and Sporty Jewels is striving to do just that.”

The Sporty Jewels (www.sportyjewels.com) line of jewellery now encompasses everything from rings, pendants and earrings to bracelets, cufflinks and even belly jewels. The range also uses a modern sterling silver alloy that is extremely tarnish resistant and perfect for the athlete in your life – whether it’s that special somebody or the one inside you. This advanced technology maintains its luster for long periods of time and requires only an occasional wipe with a soft cloth to remove any smudges – a perfect fit for hard-working athletes that want to sport a little extra sparkle. These distinctive works of art are also available in 14kt gold, and serve as perfectly wearable mementos of special events you’d like to commemorate in a special way by going that extra mile.

The Sporty Jewels have also started developing a following amongst athletes of the highest order, we’re pleased to have provided pieces to Olympic medal winners Silken Laumann, Carol Huynh, Catriona LeMay Doan and triathlete Simon Whitfield. With the games and athletes set to entertain fans around the world in February, these exclusive jewellery items are about to garner some fans of their own. Sporty Jewels are available for purchase at selected athletics retailers in Vancouver as well as online through the website http://www.sportyjewels.com – and for once it’s the silver that an athlete wants!