Will Premier Redford’s TV message address Alberta’s tax dilemma?

“Our party was elected to keep building Alberta — to focus our spending on the priorities that you told me were important, and that is exactly what
we’ll do.” – Premier Alison Redford in an email to Progressive Conservative Party supporters on January 23, 2013

Premier Alison Redford will star in a pre-recorded television message tonight following the 6pm news hour on CTV in Calgary and Edmonton. The Premier is expected to use the 8-minute address as part of the government’s ongoing exercise of managing public expectations about the upcoming provincial budget.

The budget is expected to include a projected $3 billion deficit, largely influenced by a lower price of oil than  including a drop in the price of oil. The promise of “no new taxes, no service cuts” has put Alberta’s Tories in an unenviable political bind and set the tone for this year’s provincial budget debate.

Despite the cries of fiscal hawks wanting to slash and burn the province’s public services, as I wrote earlier this month, Alberta’s revenue problem has already become the defining issue the 2013 budget debate.

Raising the levels of natural resources royalties or reasonably increasing taxes are not issues the Premier is expected to touch on during tonight’s television appearance, but raising taxes is an issue that a handful of former politicians have recently delved into. Former Premier Ed Stelmach, former Finance Minister Shirley McClellan, former Deputy Prime Minister Anne McLellan, and former provincial Liberal leader Kevin Taft tackled the tax dilemma facing Alberta’s finances last weekend at the University of Alberta.

According to economist Bob Ascah, who was at the weekend event, a one-per cent sales tax could raise $750 million in revenue for the province.

And as reported on David Climenhaga‘s Alberta Diary Blog, Glen Hodgson, the chief economist of the Conference Board of Canada has also weighed in on Alberta’s tax dilemma:

“Not having a provincial consumption or sales tax is highly popular and has been great politics, but it denies the provincial government a steady and stable source of revenue through the business cycle.”

15 thoughts on “Will Premier Redford’s TV message address Alberta’s tax dilemma?”

  1. Our health care premiums brought in $3B. Covers our deficit, covers half of our medicare costs, low income doesn’t pay. Done.

  2. @Chris: Your math is a way off. Health premiums brought in $1 billion – less than 9% of expenditures – and were an unfair tax on Alberta’s low income residents who were without employer plans to pay their premiums as a benefit.

  3. Sales tax is regressive and hits the poor the hardest. Raise taxes on high income earners, really Premier Redford, we are not Republicans in Alberta and Alberta’s high income earners will not explode and die, or even complain that much if you impose a modest increase. You can not add sales tax if you keep the top rate of income taxes at the current low level (lowest in Canada). If you do impose a sales tax, make it refundable to low income Albertans, and start with a rate of at least 3%. Again, Albertans will not explode over this. Bring back health care premiums too. It was a modest amount, but it does need to be indexed to taxable income. Albertans would prefer a dependable health care system over a couple of hundred bucks a month. It is not rocket science.

  4. Somebody once said something like…People don’t bring their schools and hospitals when they move here… (to work in our golden petro-economy.)

    Except, we have a corporatist petro-state that genuflects for the industry and provided a flat income tax for the province’s upper class.

    excerpt: “Warrack, one of the architects of the iconic Alberta Heritage Fund, told the Tyee … that the province is being run like a “banana republic” for failing to collect fair rents for non-renewable resources like the oil sands.

    http://thetyee.ca/Opinion/2011/04/13/HarpersBigQuestion/

    ==== and this…

    excerpt: excerpt: “In 2010, Alberta collected just 11 per cent of the tar sands’ economic rent, or excess profit.”

    http://www.ipolitics.ca/2013/01/22/canadas-two-new-solitudes-one-wealthy-one-wanting/

    =====

    Alberta governments get extorted/fleeced, act like serfs to the petro-state branch offices headquartered in Calgary. Said ruling class cheered on by Calgary public school’s MSM propaganda in sunny wildrose corporatist country.

    Hence: Must cut services to the public…Best of all possible petro-states. See Chapter 9, Klein Revolution, Mark Lisac, 1995 or Stelmach’s cement boots history.

    Sam Gunsch

    ====

    excerpt: “In 2010, Alberta collected just 11 per cent of the tar sands’ economic rent, or excess profit.”

    http://www.ipolitics.ca/2013/01/22/canadas-two-new-solitudes-one-wealthy-one-wanting/

    excerpts: “The oil and gas sector’s effective tax rate is just seven per cent.”

    “In 2002, Alberta’s per capita GDP was 10 per cent above the Canadian average. By 2010, it was 49 per cent above the Canadian average.”

    Subsidies to the oil industry by both levels of government totalled $2.8 billion in 2008. Alberta received $2.1 billion, or 73 per cent, of those subsidies. Half of that subsidy money came from Ottawa.

    from: statistics in a new report, The Petro Path Not Taken1, …

    excerpts: “PM’s favourite province squandered its petro profits like a ‘banana republic.’ Is this any way to run an economy?”

    excerpt: “Warrack, one of the architects of the iconic Alberta Heritage Fund, told the Tyee earlier this year that the province is being run like a “banana republic” for failing to collect fair rents for non-renewable resources like the oil sands.

    http://thetyee.ca/Opinion/2011/04/13/HarpersBigQuestion/

    Warrack is a professor emeritus of business economics at the University of Alberta and former minister of lands and forests in then-premier Peter Lougheed’s cabinet in the early 1970s. “

  5. Corporatist policy outcomes re inequality:

    excerpt: “…inequality is substantially higher in Alberta than the Canadian average, and has grown dramatically the over the last decade. Alberta’s rich­est one per cent have a much larger share of the provincial income pie than the one percenters’ share of income nationwide. And Canada’s super-rich are increasingly concentrated in Alberta.”

    http://rabble.ca/blogs/bloggers/behind-numbers/2013/01/our-way-or-norway-managing-petroleum-wealth-canada?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rabble-news+%28rabble.ca+-+News+for+the+rest+of+us%29&utm_content=Google+Reader

    excerpt: While numbers for individual households have dropped, need for larger service groups that receive hampers, including the Calgary Drop-In Centre and the Calgary Boys and Girls Clubs, have increased 22 per cent over the last year.

    “The distribution of wealth continues to be uneven in our community,” said Sim, explaining that most of the Calgary Food Bank’s clients are employed, but struggle with the city’s high cost of living.

    http://www.thedi.ca/declining-numbers-at-calgary-food-bank-buck-national-trend/\

    Tax policies for the “super-rich”, education and healthcare and senior cuts for self-made, no-handout’s, hardworking Albertans. Unless you’re hungry or need some clothes. Then we won’t let you starve because we’ve got great foodbanks.

    What a great governing class we’ve fossil fooled into existence.
    Sam Gunsch

  6. It’s odd hearing so much discussion about weak revenues from the ‘rapidly plummeting price for Alberta Oil’ when Western Canadian Select has increased its realized price almost 7% (count ‘em) since Monday.

  7. Redford is a true conservative and realizes that this is a SPENDING problem and will cut spending, not increase taxes.

    Dave, how can you say this is a revenue problem when we spend the highest amount per person on services in Canada?

    Redford will cut and like Klein will win the next election.

  8. hi I hope she still continues to support AISH
    it should be a lot higher than |$1588 like $2000.
    per month.

  9. Before anyone gets TOO excited by the prospect of bringing back health care premiums, consider that the COST of administering and collecting those premiums was quite significant. That’s one of the “practical” (as opposed to political) reasons that it was discontinued.

    The NET gain of health care premiums would be relatively quite minimal.

  10. I think we need to look at both sides of the coin. Cut back on some program spending and increase revenues too. Any increase should be thru progressively higher tax brackets, flat taxes are a ridiculous legacy of the Klein/Wild Rose/Republican mind set.

    Oh, and I hope she clearly tells the cities no to any money for rich owners arenas.

  11. The mantra about over-spending relative to other provinces is nonsense. Most of the alleged extra spending goes to wages for public-sector workers who are, as one would expect, better paid in AB than elsewhere. That’s because so is everyone else. In 2011, GDP per capita in Canada was $51,109. In Alberta it was $78,154 or almost 60 percent higher. But even using Wildrose figures, Alberta spends about 25 percent more than other provinces, that is, it spends far less extra than its income allows it to spend.

    Provincial taxes on individuals in AB, with both income taxes and sales taxes factored in, are less than half of what other Canadians pay. Of course, because of the flat tax, Albertans under about $50,000 a year get no particular tax advantage from living in Alberta on the income tax side. Higher income earners, including myself, get all the benefits. We (well actually my income at the time was absolutely and relatively more modest) paid something close to our fair share when that “socialist” Peter Lougheed was premier but since Ralph decreed that wealth did not mean any obligations, that has changed drastically.

    As the Parkland Institute has pointed out, we could raise an additional $10 billion in income and corporate tax per year–not to mention about $17 billion extra in energy royalties–and still be the lowest-tax province in Canada. We could have a fully public long-term care program, plus Manitoba’s excellent home care program, Quebec’s 7 dollar a day daycare, and the best environmental, healthcare, education, and arts programs in the country (we are middle-of-the-pack now in some areas and nowhere in others) if we had not become so tax averse.

    It’s NOT in the DNA of the province, as some argue. We put about twice as much of our GDP into provincial government spending and saving (Heritage Trust Savings Fund)in the Lougheed PC period. But nowadays none of our parties to the left of the Tories are willing to embrace the fiscal policies that at one time belonged to the right-wing party in the province. How did our whole political spectrum move so far to the right? And more importantly is there any chance of moving it further left? The idea that rich Alberta cannot find the funds to look after those needs of people that are generally recognized by most Albertans as the responsibility of a provincial government defies commonsense.

  12. Globalist scum. Just because you can’t stick to a budget, doesn’t mean you come and steel what little I have left out of my budget. Why is it us normal citizens are the only ones that have to manage a budget. Put away your red carpet, royalty life and stop attending Bilderberg Meetings on our dimes and more looting of our pensions and wealth through back room deals.

    We have been taken over by banks and government is their puppet. Anyone who is truly awake knows this. All government is connected globally. We the sheeple have been signed on to ALL debt. There is a global debt crisis and when people lose everything, and there is nothing left to lose they lose it.

    Don’t Tread On Me

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