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
