Author: claytonwelwood

The Vancouver Bus Strike, and Public Transit’s Future

With the transit workers’ strike set to escalate this week, many people who rely on public transit will face longer commutes. While many Vancouverites sympathize with the workers’ demands for adequate break times, and wage increases commensurate with the rapid rise in cost of living, there’s a certain irony in the situation—two creatures of the state battling it out, with the public left in the lurch.

The first creature is Translink, the Authority created by the provincial government to govern and operate public transit in metro Vancouver. The other is the unions representing transit workers, which I also consider a creature of the state because it uses the coercive power of government to fund its activities; employers are legally required to collect union dues from all workers in the bargaining unit, whether they wish to be part of the union or not.

Under this arrangement, labour unrest and strikes are inevitable. Because Translink has a monopoly on public transit, there are few competitors bus drivers can switch to if they don’t like compensation Translink is offering. Because of this, the workers at one point voted to let a union represent them in negotiations with their employer.

This situation sometimes also arises in the private sector; for example among workers for the one lumber mill in a small town. In this case, there’s a factor that pressures both parties to stay at the bargaining table and avoid stoppages in work—the fact that such job action may impact the company’s sales, pushing customers towards competitors. This isn’t in the interests of either the management or workers.

However, in the case of public transit, customers do not have the option to switch to a provider other than Translink. Sure, there are other options for commuters, and these aren’t too bad if you own a car or don’t mind cycling to work in late November. Bit pity the poor souls who hoped they could rely on ride-hailing services as a commuting option, because with the licensing and level of regulation the province has imposed on this new sector, it won’t be affordable with most people who rely on public transit.

Another option which could provide relief during a transit strike is privately run inter-city bus service. However, the Passenger Transportation Board (PTB) has made this a non-starter in BC, again with a licencing and regulation scheme that heavily favours incumbents over start-ups. One such service between Surrey and UBC started up last year, but because a condition of the license was that the operator could not change any aspect of its business plan (route, stops, pick-up times, etc.), the business quickly failed. The PTB also has a process that allows public comment on new license applications, but such comments require a $50 fee! The individual commuters who would benefit from the new service would find it hard to rationalize paying $50 for the chance at getting it, whereas the existing operators would happily pay $50 to quash a new competitor.

We don’t have to look to far back in Vancouver’s history to find a time when public transit wasn’t monopolized by a government entity. And if we look outside of Canada, there are many examples of privately and publicly funded transit systems existing side by side in the same city. Tokyo’s system is particularly interesting, with its competing private and public commuter railways, that are still all accessible to passengers with a single fare card.  And privatizing transit can save taxpayers money, without necessarily reducing services.

Public transit in Vancouver (like so many other things here) is very costly compared to other cities. And as the demand for transportation continues to climb, so does the price tag for additional infrastructure, like the new Broadway SkyTrain line. According to a 2012 Ministry of Finance audit of Translink, only 33% of Translink’s revenue is from fares; the rest is from fuel and property taxes. As drivers use less gasoline, the fuel tax revenue stream will continue to decrease. Translink and Coast Mountain Bus Company also have high overhead costs compared to their peers in other cities, as evidenced by the high salaries Translink executives are paid (the CEO gets $160k more than the Prime Minister—for more on this injustice, see my blog post from earlier this year). So it looks like there’s plenty of room for Translink to make more efficient use of the taxpayer dollars it receives, but for it to become truly efficient, it will have to face real competition.

A great first step would be to eliminate the Passenger Transportation Board. This would allow more private buses from the Fraser Valley and Sea-to-Sky areas to serve those commuting to Vancouver. It would also allow ride-hailing services to operate freely. There’s probably a market for mini-bus services that offer more comfort than a packed SkyTrain car, but are less costly than a private automobile. The province should allow entrepreneurs to experiment with such services without licensing schemes that are rigged in favour of incumbents.

The main barrier to moving away from the expensive, inflexible model of public transit we currently have is that we’re stuck in the statrix (the state + the Matrix = a state of mind where citizens can’t imagine the state not providing certain public services). We need to look to our own past, to the present in other countries, and to the future of transportation promised by new technologies, and think about how we can set up a financial sustainable public transit system that has the ability to grow and adapt as Vancouver and surrounding areas grow, technologies change, and the lifestyles and preferences of Vancouverites shift.

Clayton Welwood, Candidate for North Vancouver-Seymour

For more on how the BC Libertarian Party is fighting to inject real competition into BC’s transportation sector, visit

Translink Execs Want to Have their Cake and Eat it Too

Translink’s board of directors recently voted its top executives a pay increase of up to 25%, and the new range for the CEO is now $406,634 to $517,443.  The value of benefits they receive is on top of this. Now, half a million dollars is more than the Prime Minister gets paid, so how does Translink justify it?

Translink hired a consulting firm to help them with a months-long review that resulted in a report that (guess what?) recommended the increase. Why? Well, they found that Translink’s exec compensation was lagging behind similar organizations in Canada, like the Toronto Transit Commission (which is a little like the Soviets comparing one collectivized farm to another collectivized farm, while ignoring the productivity of independent farmers).

The report underlined the need for Translink to attract and retain top talent. There’s probably some truth in that, but  so we should be critical of that claim. It’s true that for-profit corporations often pay their top executives a lot more than that, but they also face much greater challenges.

For one, for-profit corporations have competitors, often a lot of them! CEO’s of these businesses know that if they lose market share to competitors, it can result on layoffs, bankruptcy, and serious financial loss and reputational damage to the CEO. Translink, however, has no direct competitors; there are no other mass transit systems in metro Vancouver, because they have been outlawed. Even indirect competition (through inter-city private buses, taxis, or ride-sharing companies like Uber) is limited by the Passenger Transportation Board. Honestly, do you need to be a management wizard to keep your company afloat when you have a government-granted monopoly?

For-profit corporations, if they’re publicly traded, also have to please shareholders, which can be tricky when there are competing goals of long term capital investment and quarterly earnings increases. Translink executives have to keep the mayors from getting too upset, but don’t have to face the discipline of equity markets. Ultimately,  taxpayers foot the bill for Translink’s capital projects, but the mechanism for taxpayers to decline funding for a project (voting for politicians) is so occasional and imprecise that it doesn’t have much impact on the day-to-day management of public transit.

Then there’s customer satisfaction to be reckoned with. In some ways, Translink is subject to this, but not to the same degree as most private sector businesses. One rude remark by a check-out clerk can lose a supermarket a life-long customer, but that seldom happens with public transit. Those who take the train or bus to work are willing to put up with surly bus drivers because the alternatives are so scarce.

So, Translink executives don’t face real competition, the agonies of raising capital on the market, or the threat of customers abandoning them due to sub-par service. But yet, they expect to be compensated at the same level as companies that do.  All the security of a government-granted monopoly with the salary of  successful entrepreneur…nice gig if you can get it!

Clayton Welwood, Candidate for North Vancouver-Seymour

For more on how the BC Libertarian Party is fighting to inject real competition into BC’s transportation sector, visit

Freedom of Expression and Shifting Identities

On April 15th, the BC Supreme Court issued a judgement in a case involving a transgender child and the child’s father. I’ll start with the judgement, then fill in some background of the case, and lastly discuss the larger social and political context.

First, the judgement, which may be considered a landmark, for good or ill. The names of the parties have been anonymized, and the child is referred to as “AB”, and the father “CD”. This is the key part of the judgement I’ll discuss in the blog post:

It is declared under the Family Law Act that: […] attempting to persuade AB to abandon treatment for gender dysphoria; addressing AB by his birth name; referring to AB as a girl or with female pronouns whether to him directly or to third parties; shall be considered to be family violence under s. 38 of the Family Law Act. [emphasis mine]

There are other parts of the judgement that are important, such as AB being allowed to consent to medical treatment (hormone therapy), and legally change his/her name without parental consent, even though AB is only 14 years old.

The essence of the case is that AB, who was born female but had started identifying as a boy a couple years earlier, asked the court to prevent his/her father from publishing, speaking or giving interviews about this case. In opposition to AB’s mother and medical professionals, the father disagreed that hormone therapy was in the best interests of AB, and had been telling the story of this struggle to certain media outlets. The judge agreed that having this story in the news exposed AB to potential harm, and issued a public ban, in addition to the judgment quoted above. The father opposed this judgement on grounds that it violates his freedom of expression, and will appeal the decision. The court also issued a protection order stating that the father can be arrested if he violates the terms of the judgement.

The judgement rests on the idea that individuals have a right to their identity, and if others refuse to recognize that identity, this can cause the individual genuine harm, hence the state can punish those who refuse to recognize the identity. If people always identified as what they are, in an objective sense, this idea would have some basis. So, if a child identifies as a human (because she is human), but her classmates continually referred to her as a chimpanzee, that could rightly be regarded as harmful.

Let’s imagine another scenario, this one of a 16 year old boy named John Smith. He’s 5 feet, 8 inches tall, and believes he’s “a tall guy,” even though he’s only of average height for his age. He’s even given himself the non-ironic nickname John “Tall-man” Smith, and insists that everyone refer to him as such. Though his measurable height isn’t in question, there terms “tall” and “short” are not strictly defined, and John believes he should be counted in the “tall” camp. John’s friends, parents, and neighbours, not wishing to harm his self-esteem, agree and begin referring to him as “Tall-man.” But the problem is that the other kids his age at school, particularly the boys, disagree and see him as average height. Instead of “Tall-man,” they start calling him John “50P” (for 50th percentile) Smith, much to John’s chagrin. One day, the situation comes to a head with a shouting match in the hallway between John and another boy. The Principal then sits the two boys down in his office and the following conversation ensues:

Principal: This name-calling has got to stop. You’re really hurting John’s feelings.

Boy: Really? All we did was call him 50P because he’s of average height, but insists we call him “Tall-man.” It’s ridiculous.

Principal: Well, it’s not nice to judge people on their height. And John has asked that we all call him “Tall-man,” and I think we should respect that.

Boy: Fine, I’ll stop calling him 50P. But there’s no way I’m calling him “Tall-man.”

Principal: For the sake of keeping the peace at this school, I must insist that you do. And if you will not, you’ll be suspended.

Boy: You’re nuts.

So, how do you think things will play out the next time this boy encounters John? I’d say the most likely scenario is that this boy will refer to John as “Tall-man”, but in a completely sarcastic tone that makes it clear to everyone that he doesn’t think John is tall.

The principal’s order is likely to be ineffective. Some students may go along with it to avoid punishment, others may not. But unless the cultural understanding of the categories “tall,” “short’ and “average” begins to shift, all the principal’s rule serves to do at best is make the students speak, but not think, differently.

When John graduates from high school and goes to university, he’ll be crushed when the students there see him as average height. The only way for such a policing of speech to work in the face of deep cultural resistance, is for the authorities to double down on enforcement, à la 1984. With enough coercive threats, the authorities may get the population to actually change their thinking.

Thankfully, on the topic of gender, we aren’t there yet, but the BC Supreme Court’s decision on the case of AB takes a decisive step in that direction. The judgement states that even if the father refers to AB using female pronouns while speaking privately to a third party, this would be considered “family violence.” Now, the legal definition of “family violence” under the act is broader than what the lay-person would consider to be violence, and includes the highly debatable definition: “unreasonable restrictions on […] a family member’s […] personal autonomy.” These legal subtleties are usually lost in the public discourse on such issues, and trans-rights advocates may be quick to say that those who don’t agree with their proposed reforms are also perpetrators of violence. So, just as a shared cultural understanding of what constitutes “male” and “female” has come into question, so has the meaning of what constitutes “violence.”

The problem is that the semantic subtleties will be lost on most members of the public, and the public debate then becomes about whether it’s ok or not to use state violence (imprisonment) to stop this kind of “family violence.” It’s a false choice based on a faulty understanding of the problem, and injects rocket fuel into an already heated debate about people changing genders, and how many genders there are. Instead of focusing exclusively on making arguments against a binary concept of gender, or in favour of acceptance of trans-genderism, their proponents will focus more energy on using the power the state to achieve their aims, if the state appears receptive. This judgement by the BC Supreme Court sends a clear message that it is receptive, and that compelled speech (e.g. requiring the father to use the gender pronouns his child prefers) is one of the remedies it is willing to apply, even though this may violate constitutionally protected freedoms of expression.

Historically, courts were not activist institutions looking to change society by mandate or decree. The English common-law tradition practiced in Canada was always been conservative in nature, seeking to spell out the principles of law on which the vast majority could agree. Today, courts are increasingly used to impose the will of the progressive minority on to the rest of society.

The trend is most clearly seen in Canada’s Human Rights Tribunals, which are not staffed by trained legal professionals and are often instead staffed by people who have made a career of fighting for progressive social justice causes. The modus operandi of these institutions is to accelerate cultural change, rather than to act as impartial arbiters, and it seems that courts of law are being enlisted in this effort.

This presents a serious problem as we move further into the 21st century. The reason why we’re having fierce debates about gender in 2019 (as opposed to 1969), is that the technology is now available to modify a person’s sex in profound in ways that were not available 50 years ago. We can’t yet change DNA (a woman who undergoes a sex change to become a man still can’t trade half her X chromosomes for Y’s), but the possibility is not too far off. And it’s coincidence that the interest by many young people in switching genders has occurred in the age of social media, where individuals have great latitude in how they craft their online identities.

Genetic manipulation and other new technologies will open up other avenues for individuals to become something they were not born as. The technology to change one’s appearance so as to look like a different race (by reconstructive facial surgery, hair replacement, and skin colour changes) already exists, and will continue to improve (if there’s a demand for it).

And this is just the tip of the iceberg. What happens when humans are able to incorporate animal DNA into their bodies, or use other means to add non-human features to their appearance? A guy with a rhino horn sticking out of his forehead who insists he’s a rhino may seem laughable to us today, but if you told people 50 years ago that in 2019, people would be undergoing mastectomies and reconstructive surgery on their genitals to change their sex, they would have been just as incredulous.

It doesn’t stop there. What if 50 years from now, people spend the vast majority of their time in virtual environments where there are no physical limitations on their appearance? If all the meaningful parts of one’s life are conducted via his virtual avatar, then it could be argued that one’s adopted virtual identity is as real, if not more real, than one’s biological identity.

It won’t be long until the courts and society at large will have to grapple with such complicated issues of identity. If the approach of progressive activists and their allies in the courts is going to be to use the coercive power the state to make individuals recognize the adopted identity of other individuals, we’re heading for a very strange and nasty world.

BC’s courts, as they exist today, don’t even have the capacity to handle the current volume of civil and criminal cases that are put before them. If the scope is expanded to acting as identity enforcers, I don’t see how they could cope. So possibly some new branch of government could be created to police how people interact with one another and ensure that everyone’s unique identities are respected. Such a scheme would either be unworkable, or highly repressive.

In order to streamline things, the government would surely create a list of approved identities, for which individuals would have to apply for a license. Soon we’d have a new monopolistic ICBC (Identity Certification of British Columbia) taking fees and handing out ID badges with pictures of dragons, Vulcans and giraffes on them.

Bureaucracies try to standardize things as much as possible, which is the exact opposite of what people are trying to achieve by adopting all sorts of different ideas, so the ICBC model isn’t going to work. The only realistic alternatives are voluntary ones, where people find ways of coming to terms with the identities of others without it coming to blows.

Over most of human history, cultural changes, including the appearance and acceptance of new identities, have happened quite slowly. During the past 100 years, western liberal societies have demonstrated that they are pretty good at adapting to cultural changes without coming apart at the seams, but the next 100 years will really put our tolerance to the test. We are going to face some serious challenges to what it means to be human, and who counts a person, entitled to the rights we believe all humans deserve.

Our rulers are not wise enough to figure this out on their own. It’s going to require many conversations between people at all levels of society if we’re to have a chance of achieving something close to a common cultural understanding. And those conversations will need to be frank but respectful if they’re to achieve anything. Using the heavy hand of government to limit what can be said or force those conversations in a certain direction will ultimately fail, but has the potential to do a lot of harm along the way.

Clayton Welwood is the  BC Libertarian candidate for North Vancouver-Seymour, and leads the Party’s  Outreach Committee. If you would like to help us preserve freedom of expression in BC, join the Party today for just $5 a year.

PRESS RELEASE: BC Libertarian Party Storms 420 Vancouver, Calls for Total Overhaul of Broken Cannabis Laws

VANCOUVER, BC: The British Columbia Libertarian Party welcomes the public to meet and greet with its leadership and candidates during this year’s Vancouver 420 Cannabis Protest at Sunset Beach on April 20th, 2019. This year, the Vancouver 420 organizers have granted the BC Libertarian Party a great corner Booth in Spot #191 for the entire duration of the event. (Refer to:

We believe the BC NDP have completely fumbled the important multi-billion dollar cannabis file to ruinous results, and innocent Canadians continue to get caught in the cross-fire. Furthermore, federal regulations have resulted in cannabis price increases of more than 17% across the country.

If the government’s goals was curtail the black market and squeeze out organized crime, it’s failing badly. So far, it has mainly been government insiders, former police chiefs and major liberal donors who have earned a share in the new government-run industry, while the entrepreneurs and activists who built the original dispensaries and compassion clubs have been shunned and left behind.

One of the first orders of business for the Libertarians in Victoria would be to stop police from arresting people for Cannabis distribution, possession and consumption. We would then work with municipalities to set up legal a framework to allow the Craft industry to “come out of the closet” and flourish in a free market.” – Keith Komar, 2017 Libertarian Party candidate, East Kootenays.

Today, we’re launching a campaign called #FreeMyBud to call attention to the failures of the government’s heavy-handed approach to cannabis legalization. For more info visit:

A BC Libertarian government would maintain a light-touch in implementing the legal market. We would apply only the Provincial Sales Tax on cannabis (no sin tax!) and would adopt the minimum federal regulations (barring sales and marketing to minors) without adding to them. This will place cannabis in a similar situation as beer and wine in BC.

The current provincial retail regulations are too onerous, and don’t allow communities enough flexibility in how they deal with dispensaries and other cannabis retailers. A BC Libertarian government would scrap these regulations and allow municipalities to use existing authority to regulate the sale, use, and distribution of cannabis in local communities as they see fit.

For more on our cannabis policy visit:

The BC Libertarian Party has a strong and far-reaching political platform covering many important issues in British Columbia, including proper cannabis reform. This platform is based entirely on individual freedom, personal responsibility, and a greater number of options for British Columbians across many sectors of public and private life. For details visit:

Whether it’s fixing the broken cannabis regulations, abolishing the ICBC dumpster fire, or simplifying and reducing taxes, the BC Libertarian Party has something to offer every citizen across this beautiful province who wants a more free and more affordable life for their families and their communities.

Come speak to the Party leadership and star candidates of the only registered provincial Party that dares to show up to this controversial event at Booth #191.

We want to hear your voices.

Kyle McCormack – Board Member, 420 Organizer
236-881-7045 For Phone/Radio Interviews

Don Wilson – Party Leader

British Columbia Libertarian Party703-1180 Falcon Dr., Coquitlam, BC, V3E 2K7

The State Giveth, and the State Taketh Away

by Clayton Welwood – Candidate for North Vancouver – Seymour

With an election half a year away, the federal government has started an ad campaign to remind Canadians how much they’re helping them financially. It’s called My Benefits and Credits, and it features heartfelt videos from citizens who are grateful for the GST credits, Canada child benefits, and other payouts from Ottawa.

But as surely as the government gives, it also takes away, and usually the latter more than the former. When I first heard Frederic Bastiat’s pithy definition of the state, it pulled together in my mind a huge tangle of misgivings, suspicions and frustrations I had with the top-heavy, tax-hungry, wealth redistributing, program-for-every-problem nanny states that we live under today. Bastiat wrote, in 1848:

The state is the great fiction by which everyone seeks to live at the expense of everyone else.”

We all know that the state must take more than it gives, but many people delude or console themselves with the thought that some other guy is getting stuck with the bill, while they extract more benefits than they put in, or at least break even.

The truth is, if Canadians of even modest means really scrutize their balance sheet with all three levels of government, all but the utterly destitute will find themselves in the red. If you ask someone, “How much tax do you pay?” they’re likely to think of income tax, and give you an answer like “30%”. The purpose of this post isn’t to convince you that taxation is extortion—if you’ve read this far, you probably already understand that it is. Rather, I hope help you see just what a large chunk of your earnings goes to the government even after they’ve taken up to half your income right off your paycheque (top combined BC/federal income tax rate is 49.8%, and the amount that exempt, a mere $10,682 provincially and $12,069 federally).

Before we get to all the ways governments increase the price of the things you buy, there are a couple of source deductions that are worth mentioning: CPP and EI. These are called insurance premiums, but in fact, they are taxes. With real insurance premiums, you have have a choice of insurance providers and a contract with one of them that gives you a claim on a payout under defined circumstances. You don’t have that with the Canadian Pension Plan or Employment Insurance. All you have is a spot in a welfare line, and the hope that the fund won’t be bankrupt by the time you need to make a claim. Assuming you’ll be eligible for a payout, the rates of return on CPP are terrible, hovering around 2% for people born in the 1970’s or later. Considering the contribution rate is 5.1% of your earnings (and set to rise over the next few years), you’d be much better off investing this money in your own RRSP. And with EI, it’s even worse. If you manage to never get laid off, sick, or pregnant, you’ll never see that 1.62% of your income again! EI, in my opinion, is not much more than a wealth transfer program from some occupations (year-round) and regions (western) to other occupations (seasonal) and regions (eastern) that a particular political party (Liberal) has used to buy a lot of votes with over the years. Those of us who aren’t on the receiving end of this scheme would be much better off if we just stashed that money in our own rainy-day fund, or set up coverage with a private insurer.

Case Study #1: Henry and the Canada Child Benefit

Getting back to the My Benefits and Credits campaign, we hear from “Henry” about how, as a new parent, the expenses just kept piling up and he thought, “there must be programs out there that can help us.” Because, you know, having a kid when you’re in your 30’s and married, is like a totally unexpected financial hardship…Anyways, I don’t blame Henry too much. He’s probably a hardworking guy who’s paid hundreds of thousands in taxes so far and feels it’s reasonable to get a bit of it back at this stage in his life. Not sure what Henry’s situation is, but let’s say he’s making $50k and so is his wife and they’ve got one infant. That would get them around $1,850 in Canada Child Benefits.

What kind of expenses will he and his wife need to pay? A big one is transportation. Let’s assume they’re like most other middle class couples and own two vehicles. Let’s say they each own a Honda Civic, one which they’ve just purchased.

The first thing Henry needs to pay is GST and PST. On the $25,000 purchase, he pays $1,250 GST. Because the purchase price is under $55k, he thankfully pays only 7% PST, $1,750 (instead of 8 to 20% for a more expensive vehicle). There are also some environmental levies on the battery and tires worth about $25.

Then Henry needs to get his new car insured. Because BC has a monopoly public insurer (ICBC) it’s difficult to determine how much extra Henry will pay for insurance over what a private insurer in a fully competitive market would charge. If he was a bad driver, there’s even a chance he’d be getting a better deal with ICBC, but let’s assume he hasn’t had any accidents. He’d probably be paying around $100 per month just for the mandatory liability coverage and fees through ICBC, and his wife, the same, so $200 per month in forced payments to the provincial government.

The other big transportation expense is fuel. Let’s say Henry lives in the suburbs of Vancouver. This means he’ll pay 25 cents per litre in provincial fuel tax, which includes a 17 cent levy for Translink. The feds take 10 cents for their excise tax. The provincial carbon tax, which went up again Apr 1, works out to about 9 cents per litre. Then there’s GST on top of this and the price of the fuel itself, which is about 8 cents with the price at the pumps currently around $1.60 per litre. That’s 52 cents in total taxes, nearly a third of the price per litre. If Henry and his wife spend $250 per month on gas, that’s $81.25 in taxes.

Speaking of the carbon tax, they’ll pay a bit more of it if they heat their home with natural gas. The cost of the carbon tax will also be passed on to them in the cost of pretty much all the products and services they buy in BC, because they all require transportation and building heating. It’d be very hard to estimate this though, so we’ll just look at their direct costs. A sample gas bill shows a typical residential customer paying $77.84 for one month, with $12.71 carbon tax, 24 cents clean energy levy, and $3.70 GST, for a total of $16.65.

We’ll assume that Henry and his wife aren’t drinkers or smokers, thus avoiding the most highly taxed commodities in BC. They will of course pay plenty of sales taxes on the everyday items they purchase, though estimating how much is difficult without knowing their precise consumption habits. Though most groceries are exempt from both GST and PST, they’ll pay both on other essentials like clothing. Let’s just use a ballpark number of $100 per month ($75 GST, $25 PST) for sales taxes paid on day to day items.

So what does the total annual tax bill look like for Henry and his wife, and how does the Child Benefit compare to it?

Expense Monthly Tax Amount Annual Tax Amount
Vehicle purchase $3,025.00
Vehicle insurance (50% of ICBC cost) $100.00 $1,200.00
Vehicle fuel $81.25 $975.00
Home heating $16.65 $199.80
Misc $100.00 $1,200.00
Total $297.90 $6,599.80


This is just a snapshot of Henry’s household consumption expenses, and doesn’t look the biggest part of his tax burden: income tax. It also doesn’t take into consideration property taxes. Even so, the Child Benefit of $1,850 he receives only offsets a bit more than a quarter of the consumption taxes he’s paid during the year. Sure, “ever dollar counts,” as the campaign tells us, but Henry’s balance sheet with the feds is still not looking very good.

Case Study #2: Shazeal and the GST Credit

What about Shazeal? The young lady who moved to a new town to go to university, and a windfall of up to…(wait for it)…$425 for her GST credit. Now, she wouldn’t have paid GST on what are likely, her two biggest expenses: tuition and rent. But what about everything else? Food, utilities, mobile phone, transportation, clothing, entertainment, maybe a flight home to see her family–let’s ballpark it at $10,000. If GST was payable on 85% of these costs, the GST credit of $425 would exactly cover her expenses.

But that isn’t the whole story. Let’s put aside for a moment the other taxes on purchases, like PST, that Shazeal would have paid, and look at her two biggest expenses: rent and tuition.

If she’s going to university in BC, she’s probably in the lower mainland, south island, or maybe the Okanagan, the parts of the province with the highest cost of living. Let’s assume she’s not living in student housing and is renting off campus. Sharing with a roomate, she could reasonably be paying $1,000 a month. Though she doesn’t see it, her landlord is passing on a share of his tax burdens to her. Let’s say she’s renting a basement suite in a house in Vancouver worth $2 million. The City’s mill rate is $2.47 per $1,000 of home, which is nearly $5,000 for the year. If the basement is a third of the house, and the landlord passes on that proportion of the property tax to his tenants, then Shazeal’s share is $70 a month. If the landlord had recently bought the property he might still be trying to recuperate the $38,000 in BC property transfer tax he would have paid.

But the much more significant contributor to Shazeal’s high rent cost is municipal zoning regulations. Unfortunately, the costs of these are nearly impossible to estimate, so let me just pose some hypotheticals: How much greater would the supply of basement suites be in Vancouver if there were no permits required for them? What effect would this greater supply have on rents? What would the effect on rents be if apartments were not prohibited by zoning by-laws in 85% of the city? How much lower would the cost of housing be if the city’s development and building permit processes took months or weeks instead of years? Because virtually all North American cities have such regulations (though some are better than others, and Houston, TX is a notable exception) it’s hard even to ballpark how much cheaper rents would be without them, but conservatively we could say 25%.

Shazeal’s other big expense is tuition. Let’s assume she’s taking a full undergraduate course load in the arts at UBC. That would mean $5,400 if she just attends Sep-Apr. Add to that $543 per year in mandatory levies and possibly several hundred more in levies that she can opt out of , like health insurance. The amount that Shazeal pays represents about 40% of the cost of her tuition, with rest paid by taxpayers. Over the course of her academic career, this represents a subsidy of tens, possibly even hundreds of thousands of dollars.

But let’s say that Shazeal isn’t interested in becoming a professor, and just wants a BA so that she can appear respectable to her friends and family back home, and be qualified for an entry-level office job. In order to figure out Shazeal’s total outlay for her 4 year degree (direct education costs only), we need to add in those notoriously overpriced textbooks, at about $400 per term. Tuition plus fees plus books equals $6,743 per year, so $26,972 for 4 years. When we consider Shazeal’s living and other expenses during this period, and the income she could have made if she went straight into the workforce, we’re up to 6 figures very quickly. It’s no small investment on her part, even if the taxpayer is picking up the lion’s share of the tab.

Though the $425 GST credit she gets offsets the GST she paid out, in the grand scheme of things she’s in a difficult financial situation thanks to the high cost of education and housing.

Case Study #3: David and Working Income Tax Benefit

Let’s turn to our third and final My Benefits and Credits case study: David. It seems that David was employed in a certain industry or profession, but lost that employment and had to change careers. While getting established in his new career, he had to make do with low-wage jobs, and was eligible for the Working Income Tax Benefit (WITB). This benefit is available to employed Canadians earning under $30,000 per year. David hints that he may be a single father, and if so he could claim up to $1,903 in WITB. Let’s assume that he earns little enough ($16,000 per year) from work that he gets the full benefit.

Now let’s look at the taxes David pays on his employment income. We’ll say that his $16,000 per year in wages is his only income. On that, he’ll have about $270 in Employment Insurance and $638 in Canadian Pension Plan contributions. Assuming he has no other deductions he can claim, he’ll pay 5.06% provincial income tax on $5,318 of his income, which equals $269. He’ll also pay 15% federal tax on $3,931 of his income, which equals $590. For the reasons I mentioned above, we’ll consider CPP and EI taxes. In total, that makes $1,767, so with his WITB of $1,903, it looks like David has just barely made it out ahead!

Let’s not get too excited for David though. This exercise only considered his tax on income. Like Shazeal and Henry, there will be taxes and government burdens on the costs of everything he buys. And unless he has a friend a relative to help provide him shelter, transportation, or cover some of these costs, David and his daughter will likely be destitute on such a low income. His monthly net income of $1,344 will barely get him a roof over his head, and of course there are other necessities to cover beyond that.

You win some, you lose most

To sum up, in 2 out of the 3 cases presented, the government benefits didn’t come close to offsetting the taxes and other government-imposed costs. In the third case, the individual barely broke even. These were my rough calculations and don’t capture the whole financial picture of these individuals. They each would have paid more taxes, but in fairness, also received more benefits (health care, education for their kids, public roads, etc). Doing a full accounting is virtually impossible, because we can’t estimate what some goods and services would cost in the absence of government monopolies and regulations.

I hope this exercise gives some sense of how there’s a spectrum of government imposed costs: from direct taxes (like income tax), to less direct ones like PST, to hidden taxes like the Employer Health Tax (which will drive up the cost of everything, from fitness membership to municipal taxes), and finally to those other unavoidable costs which can’t properly be called taxes but amount to the same thing (e.g. EI contributions, ICBC premiums). If British Columbians knew how much of their earnings they were actually paying to all levels of government, they might demand a tax cut, or at least better services.