March 28th, 2024

Is a provincial sales tax worth considering?


By Lethbridge Herald on September 17, 2022.

LEAVE IT TO BEEBER
Al Beeber
Lethbridge Herald

In coming weeks, Alberta will have a new premier. For how long though, nobody knows with a provincial election looming sometime next spring.

What’s clear is the UCP and NDP politicians are going to give Albertans one interesting battle on the campaign trail.

While Alberta is flush with cash from oil revenues and the UCP could use that as way of generating continued support from voters, the NDP could point to what it considers failings of the present government to argue Rachel Notley and her party deserve to be put in power.

No government is – or ever has been – perfect and none probably ever will be. And Alberta does have its share of social issues and other ills. 

But an argument can be made that some didn’t just appear out of nowhere after the UCP set up shop.

This country and this world are dealing with some serious issues, climate change and the ongoing threat of COVID-19 among them.

Albertans are dealing with other crises including the physician shortage which is particularly acute here in southern Alberta , high utility rates, controversy over curriculum and housing supports for the vulnerable. 

Under any government, the province will face one crisis or another – it’s life but how can the financial issues best be addressed?

A recent column by the Canadian Taxpayers Federation that ran on our Opinion page mentioned that six of the candidates for the UCP leadership oppose the introduction of a provincial sales tax, stating that such an idea could be immensely expensive.

 For example, it wrote that if a PST is put on building supplies, the cost of constructing a new home could increase by $20,000. Whether that’s fact, fiction or fear-mongering, I’m not one to say. It is interesting, though. 

 And in light of the controversy over a tweet made by mayor Blaine Hyggen on his personal account, just because I say a statement is interesting doesn’t mean I  agree with  it. While neither Blaine nor I should have to write that, unfortunately it may be a necessity. 

The column stated that B.C. residents making purchases in Alberta on such things as appliances can save money by shopping in Alberta. 

On the surface that looks great for Alberta businesses, especially here given our proximity to communities in southeastern B.C.

But is there more to the story? On any political topic, there always is and the tone of a story can depend on the narrative differing sides are hoping to portray.

The success of that narrative is what wins elections.

With a non-existent visible middle ground party, Alberta’s narrative may be one of extremes – right or left. And being a guy whose butt manages to balance extremely well on the fence, both the UCP and NDP have philosophies and ideas I agree with. 

There are times I could give virtual fist bumps to both Shannon Phillips and Nathan Neudorf and on a federal level, Rachael Thomas or Justin Trudeau.

They all are good politicians who along with their parties do have some valid points to make and great ideas for leading the province and country. 

Many people who find themselves politically in the middle of the road have told me the same thing.

 It’s easy to be critical of our politicians but if we take an objective look at what they are trying to achieve – whether they’re in power or seeking it – being supportive and positive isn’t always difficult either.

The idea of a PST is certainly one that I find really intriguing. When I moved back here from Ontario, I didn’t notice a big difference in prices between the two provinces despite Alberta not having a sales tax. 

I still don’t notice it when I make my occasional trips back.

So I wonder if the fear of a PST – like range anxiety of an electric vehicle – is fact or fiction.

Would a PST be effective in addressing some of the province’s financial problems if it was implemented on a limited basis or was introduced with a low rate? 

Given our improved knowledge about the health risks of alcohol consumption, perhaps a sales tax on booze could be implemented? And on smoking materials, as well. 

Are there products and services a PST could be applied to that would have far greater benefits than negative impacts?

Perhaps it could be considered by provincial party leaderships given the supportive housing and addictions problems we have and our lack of physicians with money being raised by a tax specifically going to alleviate some of the woes Albertans are enduring. Perhaps a limited sales tax could also be used to build new schools and repair bridges or roads. 

It would be a way of generating provincial revenue without touching the profits made from the oil industry, which given the volatility of that industry, could plummet again. 

Contrary to what the Canadian Taxpayers Federation believes,  a sales tax may be worth looking at if the party in power earmarks it for specific provincial needs. 

From what I’ve seen in comments that come in here, some people would prefer a sales tax over a hike in their personal income tax.

 People on the street have told me the same thing if a sales tax has specific targets to fund. 

To make the idea palatable and sellable, a government would have to promise to direct that money to areas where it’s most needed.

Would it be possible to introduce a narrow tax without widespread uproar from those impacted by it? Beats me but maybe some expert could answer that question.

If not, then maybe a blanket sales tax at a much lower rate than in other provinces – say 1.5 or 2.5 per cent – could be applied that would soften the impact of the blow and deflect it to a broader base.

We have some serious financial needs in this province that merit remedy and we will have needs down the road – like maybe a third bridge eventually for Lethbridge or a new arts centre, two matters which some residents have shown interest in for many years.

How difficult could it be for a provincial government to do an investigation of the pros and cons of a tax? 

It can’t hurt  to look into the idea, can it?

Follow @abeebHerald on Twitter.

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