Governments can tax wealth but they can’t tax it into existence. I think we are losing sight of that a little bit in Canada. It seems whenever we have a problem the answer is increasingly another tax. Housing is unaffordable, add a tax. A business grows and hires more people, there are payroll taxes. Someone becomes very successful, tax them more. We are now hearing proposals for another income tax bracket for people making more than $1 million.
I am not suggesting we don’t need taxes. Obviously we do. Taxes pay for health care, schools, roads, public safety and everything else government needs to provide. People who earn more are already paying more under our progressive tax system. But at what point do we ask whether another tax is actually solving the problem?
I think we need to spend more time talking about how we grow the economy and create prosperity in the first place. British Columbia needs investment. We need people starting businesses and existing businesses growing. We need major projects getting built, more housing, companies hiring people, wages going up and businesses competing around the world. We need to grow the pie rather than spending all of our time arguing about how we divide the existing pie.
I also worry about the politics around this. It is becoming too easy to divide people into groups. Homeowners versus renters, employers versus employees, corporations versus individuals, people who have been financially successful versus people who are struggling.
Someone else’s success doesn’t have to come at my expense. We should want a kid growing up in Surrey, Prince George, Kelowna or Nanaimo to think there is no ceiling on what they can accomplish. Maybe they become a doctor, learn a trade, start a company or invent something. Maybe they start with five employees and one day have 500. And yes, maybe they become wealthy. Why wouldn’t we want that?
Housing is one example where I think we have seen this approach play out. In BC we have the Property Transfer Tax, additional tax on foreign buyers, the Speculation and Vacancy Tax, Additional School Tax, BC Home Flipping Tax, Vancouver’s Empty Homes Tax and then federal taxes and rules on top of those. Yet housing is still unaffordable.
So maybe the question isn’t what else can we tax in housing, maybe the question is why aren’t we building enough housing? A tax doesn’t pour concrete. It doesn’t speed up a municipal approval, install sewer or water infrastructure, make a project financially viable or train another electrician, plumber or carpenter. There are obviously lots of reasons housing costs what it does, but after years of adding taxes I think it’s fair to ask whether we are spending enough time dealing with the actual problem of getting homes built.
I think the same question should be asked about the broader economy. What is stopping someone from investing here? What is stopping someone from starting a company here? Why does a major project take so long to approve? Why are Canadian companies sometimes looking elsewhere when they want to expand? What can government actually do to make it easier for people to build, invest and hire? Those questions interest me a lot more than figuring out the next thing we can tax.
We should be trying to make BC and Canada one of the best places in the world to start and grow a business. Get housing built, get major projects approved while still having strong environmental standards, build infrastructure, develop our natural resources responsibly, sell more Canadian products around the world, remove trade barriers inside our own country and attract capital and talent. Productivity has to be part of this discussion too. We don’t talk about it enough, probably because it isn’t a particularly exciting political message, but if we want better wages and higher living standards we need to produce more value and become more competitive.
Growth isn’t just something that benefits corporations or wealthy people. If the economy grows, a young person graduating has more choices. A small business can hire another employee. Someone with an idea has a better chance of turning it into a company. Families have a better chance of earning more and building some financial security. Government benefits from that too. More people working, more businesses operating and more investment means a larger tax base and more government revenue without necessarily having to increase tax rates. That revenue pays for health care, education, infrastructure and the social programs we need.
There is another part of this that sometimes gets lost when people talk about capitalism or economic growth. Success should come with responsibility. If you do well, give back, support your community, create jobs, help people, give someone else an opportunity and pay your fair share. I don’t see any contradiction between those things. You can believe strongly in entrepreneurship and also believe in taking care of people who need help. You can celebrate someone becoming successful and still expect them to contribute back to society. You can believe in business and still believe in strong public health care, education and a social safety net.
I don’t like the idea that economic policy needs to become a fight between people who have succeeded and people who haven’t yet. Someone becoming wealthy isn’t automatically the reason someone else is struggling. I’d rather spend our political energy figuring out how more people can succeed. More people owning homes, starting businesses, earning good wages, building Canadian companies, attracting investment and being able to provide for their families and hopefully leave something behind for their kids.
There are always going to be debates about taxes and there should be. How much government needs, who should pay and how progressive the system should be are legitimate debates. But taxes are ultimately a tool, they aren’t a plan for prosperity. We should spend at least as much time talking about how wealth and opportunity are created as we do talking about how they should be taxed or redistributed.
For me it is pretty simple: create the conditions for people to work, build, invest and succeed. If you succeed, contribute back and help others get the same opportunity. Government can tax prosperity and redistribute prosperity, but somebody has to create it first.
Barinder S. Bhullar is a public affairs and business leader with more than two decades of experience spanning government, industry and community organizations. He has served in senior roles with the Government of British Columbia, including the Office of the Premier, and has advised organizations on public policy, government relations, international trade and stakeholder engagement. Barinder serves as a Trustee of the Government House Foundation and a Director of the Surrey Hospitals Foundation.
