By Letter to the Editor on November 23, 2019.
As a justification for his harsh budget and cuts to the elections investigator who is currently investigating him, Jason Kenney tells us that Alberta has a huge debt problem with the highest debt per capita of all the provinces. And while this is true, most economists use debt per GDP. Alberta has the lowest debt per GDP of all the provinces in a country which has the lowest dept per GDP of all the countries in the G7, one of only two countries in the world with AAA credit. With historically low interest rates, the dire straits that Kenney would have you believe about Alberta’s debt is just not that dire. At least it wasn’t until Kenney gave the largest and richest corporations a $4.7-billion tax cut.
The justification Kenney gives is that it will stimulate investment and jobs and will pay for itself in increased tax base. History has shown that tax cuts have not over the past 40 years in Canada or the U.S. paid for themselves. Kimberly Amedeo MS Management, MIT sums it well: “Tax cuts are not the most favoured solution for significant job creation É Politicians who claim tax cuts always raise revenue misinterpret the Laffer Curve.”
So, the UCP’s budget for this year is $1 billion higher than the NDP’s proposed budget and they don’t plan to return to a balanced budget until the same year as the NDP budget plan, if at all, given Kenney stakes it on the tax cut paying for itself. In the meantime, Alberta students, teachers, police forces, the handicapped, cities and rural communities – oh yeah – and election investigations will have to tighten their belts to pay for Kenney’s corporate tax cut that probably will not create many jobs or pay for itself.
Infrastructure will have to be built and maintained, we can put it off but we cannot avoid it.
Borrowing to pay for infrastructure when prices and interest rates are low and to give the economy a nice boost and that is a proven job creator makes way more sense than borrowing money to give wealthy corporations a tax cut. If government debt to pay for needed infrastructure, schools, bridges, highway twinning, etc. upsets you, then government debt to pay for corporate handouts and then using the manufactured crises to justify harsh, sometimes cruel cuts, and obstruction of justice should make your blood boil. It does mine!