February 21st, 2019

Taxes only way to reduce deficit

By Mabell, Dave on September 21, 2018.

Joel French, executive director of Public Interest Alberta, speaks on the provinces tax system during the weekly meeting of the Southern Alberta Council on Public Affairs. Herald photo by Ian Martens @IMartensHerald

Dave Mabell

Lethbridge Herald


Cutting public services and slashing budgets won’t be enough. Alberta’s annual deficit is too large for that to cure the problem.

Instead, a Lethbridge audience was advised Thursday, Albertans must consider paying for what they receive just as other Canadians do.

Unless Albertans want to accept mounting deficits and debt, they should debate the merits of a small sales tax or higher income taxes – or a little of both. That was the message from Joel French, executive director of Public Interest Alberta.

With Alberta’s fiscal gap now reaching $14.1 billion per year, according to Canada’s parliamentary budget officer, French told the Southern Alberta Council on Public Affairs a Ralph Klein-like “slash and burn” attack would not be enough.

To cut that much from the province’s budget, French said, would be the equivalent of closing all schools, colleges and universities in order to balance the budget.

“We’re not raising enough now to sustain the services we have,” he said, let alone keep up with the educational, health care and public service needs of a growing province.

But French said a retail sales tax, like those in every other province, would see between $11.2 and $21.5 billion flow into the Alberta treasury every year- depending on the rate set.

Meanwhile, the province’s personal income tax rates remain Canada’s lowest, he said – especially for well-off Albertans. Bringing them up to the same level paid in British Columbia, Saskatchewan or Ontario could bring in up to $3.5 billion more.

French said the costs of implementing a sales tax would be minimal if Alberta joined other provinces in using a Harmonized Sales Tax, with Ottawa collecting and remitting. And its impact on low-income Albertans could be alleviated through rebates like the GST cheques already sent out.

Albertans realize their government can no longer hope for an energy boom to pay down its debt, he said. But they’re just starting to consider a more conventional revenue stream.

Getting that conversation going requires political leadership, he pointed out.

“We haven’t seen leadership from any political party on this subject,” French said.

But Albertans have recently seen the impact of strong leadership, he added, with Premier Notley convincing many Albertans – and Canadians from other provinces – to support her advocacy of the Trans Mountain Pipeline expansion as a route to prosperity while evolving away from a carbon-based economy.

In a recent poll, French said, more than 70 per cent of Albertans said their governments should no longer allow fluctuations in the price of oil to determine if they’d get the hospitals and schools they need. Governments need stable sources of funding, they agreed.

But he said Albertans are just now starting to talk about selecting reliable, sustainable streams of revenue to support the services they need.

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