Strange accounting practices

[British Columbia premier Gordon] Campbell introduced a 25% cut in all provincial income taxes on the first day he was installed to office. To improve BC's investment climate, the BC Liberals also reduced the corporate income tax and abolished the corporate capital tax for most businesses. (The foregoing is from http://en.wikipedia.org/wiki/British_Columbia_Liberal_Party.)
This next excerpt is from http://thetyee.ca/Views/2005/09/26/BizBCLibs/
By Will McMartin, 26 Sep 2005, TheTyee.ca
“[British Columbia] Finance minister Carole Taylor's September 14 post-election mini-budget slashed corporate taxes by $163 million over a full fiscal year. When that amount is added to earlier business tax-reductions enacted since 2001 by her BC Liberal predecessors, Gary Collins and Colin Hansen, total business-sector tax savings exceed one billion dollars annually.
Collins started the corporate windfall in the summer of 2001 when he unveiled corporate tax cuts totalling $770 million annually. The measures included phasing out the corporation capital tax for non-financial companies; social service (sales) tax exemptions for production machinery and equipment; and a reduction in the corporate income-tax rate from 16.5% to 13.5%.
He followed with business tax reductions of $15 million in 2002-03, $26 million in 2003-04 and $65 million in 2004-05. Among those cuts included a sales tax exemption for machinery repairs; extension of the scientific research tax-credit; and corporate-income tax-reductions and incentives for film and animation production, new media, mining exploration and book publishing.
When Collins quit politics in the fall of 2004, the cumulative, yearly total of his business tax cuts was $876 million.
Hansen followed with a 2005-06 budget which raised the threshold for both the small-business corporate-income tax and the sales-tax on luxury vehicles, increased corporate-income tax credits for film production, and gave a school-tax exemption for hydro-electric projects. The annual cost of his corporate tax reductions: $24 million. Between the two of them, Collins and Hansen lowered the tax burden for BC businesses by $900 million - annually. (The tax cuts, with the exception of credits for mining and scientific research, are not temporary or short-term initiatives; they remain in effect, year after year, until changed by the legislature.)
Taylor's inaugural budget further trimmed the corporate-income tax-rate from 13.5% to 12%, and provided a new tax credit for the commercialization of life sciences. The full-year cost of these measures is $163 million.
When Taylor's cuts fully kick-in next year, 2006-07, BC businesses will be saving $1,063,000,000 annually, compared to what they paid before the BC Liberals.”
As for the accuracy of any Liberal government financial reporting, I give you the following.
And the following, from http://kaikit.blogspot.com/, echoes a report yesterday (August 19, 2010) on CBC radio in BC.
"B.C.'s budget deficit should be $73 million higher than reported, says a report released Thursday by the province's auditor general, who took issue with the way the government accounted for a massive infrastructure project.
John Doyle reviewed the government's financial statements for the 2009/2010 fiscal year and in a 62-page report, concluded B.C.'s budget deficit should be $1.85 billion as opposed to the $1.77 billion reported by the government.
Doyle's report included three reservations regarding the government's method of accounting, saying it deviates from the accounting norm, known as generally accepted accounting principles or GAAP. He said the government is not following GAAP when it comes to the $3.2 billion Port Mann Bridge project, the largest infrastructure project in British Columbia history. The government classified the Port Mann project as a revenue generator on the books when it will take 40 years to pay for itself, said Doyle. "It is a big deal," he said. "Basically, government is saying that this is a commercial activity which is self-sustaining when in fact they haven't even built the bridge yet."
"Finance Minister Colin Hansen said Doyle raised the same three budget objections in last year's report, but the government did not make any changes because it received the endorsement from the Finance Ministry's comptroller general, who essentially monitors and ensures the integrity of the province's books."
This is probably the same comptroller; Cheryl Wenezenki-Yolland, who did a less than stellar report on the Vancouver School Board.
[Regarding Ms Wenezenki-Yolland’s work, I digress to quote the following (from http://www.vancouversun.com/news/Vancouver+school+board+could+have+avoided+financial+shortfall+report/3113588/story.html)
$16.32 million: The Vancouver school board's projected deficit for the 2010/2011 budget.
$11.79 million: What the comptroller-general says the budget shortfall actually is, attributing the difference to a combination of board surpluses and overly conservative accounting. (The board argues that money is not, in fact, a surplus but has been set aside to cover anticipated bills.)]
In view of the auditor-general’s questions, I take it as fair and appropriate to assume that Ms Y-Z, whether deliberately (under instructions from the Minister of Education) or out of ignorance of GAAP, has presented us with numbers which should be ignored.]
Returning to the discussion of whether or not the BC provincial government uses GAAP.
"He [Doyle?] did not take issue with the transparency of our public accounts -- that everything is disclosed -- he just has disagreements with the accounting principles we apply to those three items, this comes down to differing opinions between the comptroller general and the auditor general as to what constitutes generally accepted accounting principles." Hansen said.
Tax cuts do not create employment. Collecting and properly spending taxes does.
“According to a 2008 report prepared for the Federation of Canadian Municipalities, every time governments put $1 billion dollars into infrastructure, they create 11,000 jobs - twice as many as an equal size tax cut.” (letter from Mr. Hans Cunningham, president, Federation of Canadian Municipalities, in MacLean’s magazine, August 23/2010, page 6) The foregoing sentence is also part of my previous post.