Stalled investments for child care and housing affordability in 2020 budget
BC government risks compromising life expectancy by over-investing in medical care

Child care

Child care is better in BC than it was prior to the last election.  But the 2020 budget shows no signs of an investment plan to make real the election promise to build a high quality $10 a day system.  The minority-NDP government’s investment in child care will stall for all forecasted years in the budget at around 45% of the $1.5 billion annual expenditure required for a high-quality system.

Even if you imagine parents will use all of the new spending invested in the BC child opportunity benefit to pay for child care costs, the BC government’s new investments in families with children will stall around half the total expenditure required by quality child care. Note, this opportunity benefit builds on an existing tax credit to deliver cash support for some families (up to $1,600/child per year – a month or two of child care costs).

Housing

Housing policy is also better today than before the last election.  But the urgency with which the province is investing to build new affordable units dropped by 15% in this budget compared with promises in previous budgets (from 15,940 units to 13,515 over the first 4 years of its plan).  

BC continues to have the largest gap between average home prices and local earnings of any province in Canada.  Whereas it used to take 5 years for the typical young person to save for a 20% down payment on an average priced home, it currently takes 19 years in BC.  As home ownership is pushed out of reach, many more British Columbians face rising rents, especially younger residents and newcomers.

According to the 2020 budget, the government expects “the total annual value of home sales” to increase 5% for the next years (p. 74).  Any projection of higher home values means that governments must urgently build on the existing 30-point housing plan to search for additional ways to address the health, social and economic harm caused by the extreme housing unaffordability challenges in our province.  

Revenue

Revenue shortfalls are not the reason for the government reducing the urgency with which it addresses child care and housing affordability barriers.  The BC government expects to collect an additional $1.3 billion in 2020.

Medical care

All of the additional $1.3 billion revenue collected by the 2020 budget will be absorbed by increased expenditures on medical care.  This medical spending increase may be the biggest ever, even though medical care already received the largest slice of the BC budget pie.

Illness treatment investments squeeze out investments to promote well-being

While it may seem counter-intuitive, our population’s health is not best promoted by investments in medical care.  The scientific evidence is clear. Health starts where we are born, grow, live, work and age. These conditions are shaped by social policy investments, like child care, parental leave, education, poverty reduction, housing, and climate change mitigation, among others.

“Medical care primarily treats illness after people fall sick,” explains Dr. Paul Kershaw, a policy professor in the UBC School of Population & Public Health, and Founder of Generation Squeeze. “We need more focus on what makes people well, and prevents their becoming sick.”

Canadian research shows that as social spending grows relative to medical spending, we are more likely to reduce avoidable deaths and increase life expectancy.     

The 2020 BC budget does the opposite, carrying on a long-term trend, “which literally risks compromising how long we live,” explains Dr. Kershaw.  This is especially true for younger residents, who receive less than half of the added per capita investment received by retirees in the 2020 BC budget.

Trade-offs between doctors’ remuneration and child care?

A new study of public finance in Canada finds that increased medical care spending over the last decades hasn’t just contributed to increased access to pharmaceuticals, CT scans, MRIs, etc.  It has also contributed to rising remuneration for doctors – equal in value to half of the cost of a high-quality child care system on an annual basis.

An ounce of prevention is worth a pound of cure

Kershaw encourages BC Ministers responsible for poverty reduction, child care, housing, education and climate change to join forces around the Cabinet Table to advance a common message: “Health starts with the issues on which our social ministries work, not medical care. So our government needs to revisit the slice of future budget increases received by the Ministry of Health, which primarily treats illness after people fall sick. An ounce of prevention is worth a pound of cure.” 

A Positive Tax Shift?

There are positive developments in the way the BC government is collecting revenue.  The additional $294 million collected by pricing pollution helps to pay for the elimination of Medical Services Premiums.  This revenue collection trend contributes to a positive tax shift where governments aim to tax “bads” more – like pollution – while taxing “goods” less – like earnings for middle and lower-income workers.  

The 2020 budget also includes efforts to raise revenue by taxing the wealthy more.  But the government continues to define “wealthy” almost exclusively in terms of income, increasing the tax rate on residents who earn more than $220,000.  By contrast, the budget forgoes opportunities to reduce income taxes on middle- and lower- earners by increasing taxes on unhealthy home values. For example, no changes were made to the minor surtax on $3 million dollar homes.  Thus, its revenue projection is stalled at $200 million per year – a tiny piece of the overall $61 billion revenue collection plan for the BC government.

For media inquiries, contact:

Dr. Paul Kershaw
University of BC policy professor and Founder, Generation Squeeze
paul.kershaw@ubc.ca (604) 761-4583

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Stalled investments for child care and housing affordability in 2020 budget
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