Tuesday, February 15, 2011

Government Natural Resource Revenues

One of the big concerns I have with the natural resource revenues the government collects is that it is a transfer of wealth from rural BC to urban BC.  

The 700,000 people that live in rural BC on a per capita basis should be receiving $6.8 billion in government services but the reality is that the vast majority of government money is spent in five communities, Victoria, Vancouver, Kamloops, Prince George, and Kelowna.   A reasonable share is spent in other regional urban centres like Nanaimo or Penticton.   There is no way that the scope and scale of services offered to the people in rural BC comes anywhere close to the per capita average in BC.

The people in rural BC pay about between $3.5 billion and $4 billion in direct personal, sales and business taxes.   Rural BC also provides BC with $3.1 billion in resource revenues.  This means rural BC is providing more than 20%, and possibly as much as 25%, of the provincial revenues collected by BC each year.

What ends up happening is that rural communities in BC subsidize urban BC.  It is Taylor BC that makes it possible for Surrey to have schools.   Terrace sends money to Victoria to help ensure Victoria General Hospital operates.   Merritt helps to pay for Simon Fraser University.   Each year something on the order of $5,000 per person in rural BC is transfered to urban BC by the government.

In the past the government had a fair amount of staff in rural communities and provided decent roads.   Those days have ended but rural BC has not been given a tax break of any sort and have just become a cash cow for urban government programs.
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