Premier David Eby has made no secret of the fact he’s preparing more financial aid for cash-strapped British Columbians caught between rising inflation and interest rates.
His government has the money, and, polls would suggest, the public support to act big. The only question remaining is: How should it proceed?
BC New Democrats have long subscribed to the idea that direct government aid should be tied to income, with those who earn a salary deemed good enough by the province cut off from financial assistance.
It’s a position backed by progressive economists, based on the idea that public subsidies shouldn’t go to the wealthy.
The principle is fine. It’s just, the NDP has never quite hit the mark on who is “wealthy” or not.
Take, for example, Eby's biggest financial aid program so far, which started to land in bank accounts last week.
A family of four could have received a maximum of $410 in the “BC Affordability Credit.” But to do so, they’d have to have had a combined household net income of less than $43,051.
That’s a very low threshold.
It’s basically a family with two adults working full time and barely earning minimum wage. Any household that earns above that amount gets less assistance, part of a sliding scale that cuts off financial help entirely at a household income of $150,051. For a single person, the maximum aid of $164 requires an income of below $36,901, and is cut off at $79,376.
Are those the right thresholds?
When you talk to New Democrats, even they aren’t truly sure. They are acutely aware that the party runs the risk of leaving out the middle-class urban swing voters that have formed the BC NDP’s power base the past two elections.
Two adults in Metro Vancouver with a combined household income of more than $150,000 may appear on paper to the government as too “wealthy” for financial help, but in reality many are still teetering on the brink of financial disaster due to rising interest rates on enormous mortgage payments (or rising rental rates), while squeezed at the same time by inflationary hikes to their bills for groceries and household goods. They could use a helping hand from the province during an affordability crisis.
“Every opportunity we see to support British Columbians, we will do so,” Eby said Monday. “We know that families and seniors and individuals are feeling the strain in our province right now.”
The Eby administration has tried to counterbalance the political short-comings of income-tested aid with flat credits through Crown corporations.
The new $100 BC Hydro credit goes on everyone’s electricity bill, whether they are wealthy or not. The two-year freeze on auto insurance rates at ICBC applies to both low- and high-income earners, as did a previous rebate last year.
In the past, part of the drive for income-tested aid programs has been the idea that the government has only limited money to spend on financial assistance, so it should target lowest-income people first.
But that’s no longer a concern for the Eby government, at least in the short term.
There’s between $6 billion and $10 billion in surplus and unallocated money available in the budget for the new premier to spend before March 31. The government’s new BC Affordability Credit cost $500 million, by comparison.
Simply put, there’s financial room for a much more ambitious direct aid program if the new premier wants it. Perhaps the government swings for the fences in the form of rebate cheques for every British Columbian, regardless of income. Or maybe it goes the route of more generous new credits with significantly higher income cutoffs that truly capture the stretched middle class.
New Democrats until now have been hesitant to consider either path.
But as the party hits the half-decade mark in power, during an affordability crisis, with a new premier and a treasury full of cash, it could start taking a wider look at just who needs financial aid.
There’s a lot of New Democrat voters who aren’t getting much help in their pocketbooks from their government. The new premier has an opportunity to change that.
Rob Shaw has spent more than 14 years covering B.C. politics, now reporting for CHEK News and writing for Glacier Media. He is the co-author of the national bestselling book A Matter of Confidence, and a regular guest on CBC Radio.
