The Sunshine Tax

 

okrailSince moving to the Okanagan Valley area, I’ve been made aware of something called the “sunshine tax.”  It’s a sort of catchall explanation for getting screwed, and perhaps the most idiotic and pretentious excuse for not understanding basic economics ever invented.

  • Gas prices just went up today — sunshine tax!
  • House prices are rising — sunshine tax!
  • Income is stagnating — sunshine tax!
  • Someone in Tuktoyaktuk makes more money than you for doing the same work — sunshine tax!
  • Traffic is bad — sunshine tax!
  • Your wife left you — sunshine tax!

The “sunshine tax” stipulates that people in Kelowna and the Okanagan Valley  get paid less and/or “enjoy” a higher cost of living simply because of the desirable climate. The sunshine as it were.

The first hint of something serious wrong with this theory appears in the ironic name itself. It’s not a tax. Nor is the Okanagan all that sunny. Sure, it’s sunnier than Prince Rupert, but the 1923 hours of sunshine per year in the south Okanagan city of Penticton is a far cry from the 2544 hours in Medicine Hat, Alberta. It’s also less than almost all major cities in Canada including Vancouver, Victoria, Calgary, Edmonton, Yellowknife, Saskatoon, Regina, Winnipeg, Thunder Bay, Toronto, Ottawa, and Montreal. If sunshine were a taxable commodity, Penticton and Kelowna would be overdue for a tax refund if anything!

The lack of sunshine aside, the climate is quite mild by Canadian standards, and that makes it one of the more desirable places to live. However, the sunshine tax explanation is not used in other cities with mild winters like Kamloops or Nanaimo or Vancouver or Halifax. They just know basic economics — a company looking for workers in northern and remote parts of Canada will need to offer higher wages to entice people to move there.

The most annoying part about someone invoking the “sunshine tax” to complain about their economic situation is that they are essentially demanding their cake and to eat it too. They think that they should get the same wages and cost of living as someone living in some remote outpost that they themselves would never live at without a significant wage increase.

So it’s not a tax, has nothing to do with sunshine, and represents nothing unique about the economic situation of the valley compared to other places that don’t have this supposed tax. Maybe it’s time to retire the self-righteous phrase, and join the realities of  planet earth.

Incidentally enough, this disconnect between reality and expectations is what has likely given rise to the “sunshine tax” phenomenon in the first place. Perhaps it’s not so much a misunderstanding of economics or a self-righteous attitude, but a failure to realize that we’ve been lied to.

Similar to the false marketing claim that the only desert in Canada resides the Okanagan Valley, marketers have also been able to project a climate with nicer weather than reality dictates. This reputation for great weather increases demand for housing and supply of workers. In turn, housing costs are driven higher while wages are simultaneously lowered.

If the Okanagan’s reputation matched reality, everyone would probably be more understanding of market conditions like they are in Kamloops and Halifax where newcomers aren’t duped into thinking they’re entering a paradise unequaled in the rest of the country.

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