Fraser Institute News Release: Federal government should emulate BC's Campbell government; cut personal income tax rates by 25% and balance the budget

VANCOUVER, BC, Feb. 4, 2025 /CNW/ - Policymakers in Ottawa should consider replicating the British Columbia government's successful fiscal reforms from 2001 to improve the economic and fiscal outlook for Canada, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"The blueprint for economic growth is simple—lower taxes, prioritize and lower spending, and balance budgets," said former B.C. Liberal premier Gordon Campbell, a senior fellow at the Fraser Institute and co-author of Federal Personal Income Tax Relief: Lessons from British Columbia.

B.C was an economic laggard in Canada for more than a decade prior to the election of the Campbell Liberals, with low levels of economic growth compared to other large provinces.

In 2001, the Campbell government in B.C. cut all personal income tax rates by an average of 25 per cent, restrained growth in annual program spending, and balanced the budget by 2004/05 and ran surpluses for four years afterwards.

As a result of these reforms, from 2002 to 2006 the province enjoyed one of the highest average growth rates in per-person GDP (a broad measure of incomes and living standards) in Canada.

Today, the federal government faces a similar situation as B.C. prior to the Campbell reforms. Poor fiscal policy and high taxes have contributed to persistent federal deficits and mounting government debt, economic stagnation, and little to no improvement in living standards.

As such, policymakers in Ottawa should emulate the Campbell government's reforms to improve Canada's economic and fiscal outlook.

Specifically:

• Cut all federal personal income tax rates by 25 per cent.
• Reduce federal government program spending by 6.7 per cent over four years.
• Balance the budget by 2028/29.

"The dismal state of the Canadian economy and federal finances requires bold policy reforms, similar to those enacted by the Campbell government in BC more than 20 years ago," said Jake Fuss, study co-author and director of fiscal policy studies at the Fraser Institute.

"The approach of the Campbell government offers a roadmap for policymakers in Ottawa to lead Canada back to prosperity."

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

SOURCE The Fraser Institute

MEDIA CONTACT: Jake Fuss, Director, Fiscal Studies, Fraser Institute; To arrange media interviews or for more information, please contact: Drue MacPherson, Fraser Institute, [phone] Ext. 721, [email protected]