First things first – let’s establish that no one wants this referendum. While the thought is nice that the provincial government told the mayors that the citizens of Metro Vancouver have to WANT to pay extra taxes, the voter is not the one that was elected to make the tough governing decisions—our mayors and our MLAs were. This referendum is the result of governments playing hot potato with the responsibility of raising the funds to fund our transportation network. But alas, here we are.
Now that we are faced with this 0.5% lemon tax, let’s make lemonade.
Here is the reality:
· The Metro Vancouver region will see one million new residents in the next 20 years.
· Our current transportation network is not currently capable of dealing with another 600,000 cars on the road.
· Our transit system is already over capacity on various existing routes (try getting on the 99 B-Line on the Broadway corridor) and is non-existent on others (Burke Mountain, the Langleys, Surrey & Delta)
· There isn’t enough money in any government coffers to invest in much needed transportation infrastructure projects withoutsignificantly harming other sectors, especially if we want to balance the budget.
Now that we’ve got the problem, what’s the solution?
Well, 21 out of 22 mayors believe that a meager 0.5% sales tax would be sufficient to fund a significant portion of the needed transportation products. And nearly every major business organization in the Lower Mainland agrees.
“Business groups supporting a sales tax? Preposterous!”
Yes, at first glance, one might find it odd that private enterprise would support the government increasing the prices of their goods and services in order to create revenue. But, it actually isn’t too odd if you examine this tax from an investment perspective.
Consider an RRSP. You visit a bank and purchase an RRSP through a broker. And every month, you take a tiny portion of your paycheck (let’s say 0.5%) and you deposit it into your RRSP. Over time, the total investment that you’ve made racks up quite a bit. But your total return will be greater than your deposit when it’s actually time to retire. The earlier you start, the greater your total returns.
Now consider what would happen if you never invested in an RRSP. By the time you retired, chances are you would be passing along the financial and emotional burden of your care to your family, who would now have to spend their money (sums larger than your tiny 0.5% payments, and in shorter amounts of time) to house, feed and clothe you, leaving them with a lower standard of living than if you had put away a small amount of money every month.
We are faced with choosing to invest in our region through the 0.5% sales tax (your 0.5% deposit from our paycheck). We know at some point, our population will increase significantly (your retirement). We have an opportunity to spend a little more of our income, invest in transportation infrastructure today and build it over the next 10 years (the RRSP). This way, we will have the infrastructure available to handle the extra people coming to our region (the return on your RRSP). Otherwise, the burden of handling the influx of people and goods will fall on our economy (your family) as businesses struggle to thrive and grow with a reduction in the movement of goods and services (a reduction in your family’s quality of life). To fix the problem later will require governments to spend larger sums of money, faster to provide the necessary infrastructure.
Now, I’m sure many people would agree with this analogy. But that still leaves the question of Translink (your broker). But let me ask you this, if your broker got large bonuses and never completed your investment requests on time, would you just stop investing in your RRSP or would you just find a new broker?
The question before us this spring is not a referendum on whether or not we should fire our broker, but whether we should invest in our retirement. Keep that in mind when your ballot arrives.
Aaron Robinson, Public Policy