Monday, March 02, 2020

The Sales Tax Bugaboo


Alberta is in a financial hole. And, Graham Thompson writes, the solution is obvious. It's as obvious as the chart in this year's provincial budget:

On page 169 of the new Alberta provincial budget is a chart that drips with irony.
It is an illustration that succinctly points out what’s right with the province … and what’s so very wrong.
It is titled “Alberta’s Tax Advantage” and points out in a province-by-province comparison how much more money Alberta could collect each year if it had the same tax regime used in other provinces.

What Kenney calls the province's advantage is the province's lack of a sales tax -- something every other province has:

If Alberta had the same taxes as Ontario, for example, it would collect an additional $14.4 billion a year. The same as Saskatchewan: $15.1 billion. British Columbia: $17.5 billion. On all the way up to Newfoundland: $25.5 billion.
Even if Alberta simply introduced a provincial sales tax comparable to BC’s it could generate an extra $7 billion a year.
That amount would be enough to balance this year’s Alberta budget — and allow the province to start paying down the province’s accumulated debt that will hit a record $77 billion this year. But the thought of a sales tax is so unpopular in Alberta that its acronym is jokingly called the Political Suicide Tax.

Rather than introduce a sales tax, Jenney cuts government programs. Finance Minister Travis Toews has signaled the road ahead:

Toews says the province is “turning the corner” this year and is forecast to finally claw its way out of the recession that hit four years ago.
But that forecast is based on higher oil prices, getting more oil to market and seeing increased investment.
Alberta is once again placing many of its eggs in the notoriously unstable oil basket.

It's a well-established pattern in Alberta. And, in the end, it's self-defeating.

Image: alberta.ca


8 comments:

Anonymous said...

Kenney gave the game away when one of the first things he did was cut corporate taxes. Cons don't care about balanced budgets when they're in office. They only care about serving their wealthy patrons. That means cutting taxes and destroying public services so a case can be made to privatize them at great cost to the public. This has been the neoliberal playbook for two generations.

Cap

Cap

The Disaffected Lib said...


This is why I have so much difficulty treating Alberta's provincial leadership as grown-ups. The late Jim Prentice hinted that a sales tax was coming but Rachel Notley who, outside of Alberta, would never be seen as progressive, knocked Prentice out of office.

The province has been a failure at avoiding the cyclical boom and bust devastation that Peter Lougheed warned of. Alberta has produced more oil - conventional oil - than Norway and has nothing to show for it. Their legendary bumper sticker, "Please God give us another oil boom and, this time, we promise we won't piss it all away," could be said to mock God herself. Perhaps she takes offence and puts Albertans in a state of cyclical penury.

If teenagers were so recklessly profligate with their allowance as Alberta is with its revenue, we would withhold their allowance. It's what makes Alberta's bitumen tantrums so nauseating. We know whatever they reap they'll just piss it all away.

Owen Gray said...

Precisely, Cap. It's all a fraud.

Owen Gray said...

The program has a long history of failure, Mound. Yet no one has the courage to change it.

Lulymay said...

I am now a student of genealogy and my research shows that my great grandmother,the widow of the manager of Falcon Brewery in Ipswich, England, arrived in Canada along with something like 8 children. She took the residue of his estate and purchased a plot of land from the CPR Land Company in London, England, which was located near the town of Midnapore, Alberta.

Researching my ancestry often took me to Census Records and in Alberta, it was astonishing to see that many of the residents in 1891, 1901 etc. were either from the U.S. or whose parents were from the U.S. Many of these folks arrived via the Western Land Grant Program.

To this day, I still see remnants of that old U.S. belief system that "we don't need no stinkin' taxes cuz we can stand on our own 2 feet" That, quite frankly, is the history of Alberta and it seems to permeate its citizens to this day.

Owen Gray said...

We've spent some time in Alberta, Lulymay. It's my impression that they just want to be left alone to do things their way. There's something admirable about that. But, at the same time, that vision is rather narrow. There are simply lots of other people out there. And they don't see things as Albertans see them.

e.a.f. said...

Once the lack of health care and education impacts Alberta people may have wished they could have paid more taxes. Cutting health care and lower doctors will not serve the public well. Doctors and nurses will leave and come to B.C. or go to Sask. How will that help the people of Alberta if the virus stays around for awhile. How will Kenny manage the budget with a pressing need for more beds and ventalators along with testing kits.

Well as I say, you will have to learn to live with it or die because of it. Good luck alberta. A sales tax, never killed any one.

Owen Gray said...

I can't help but think that all of this will come back to bite Kenney, e.a.f.