Alberta’s Provincial Sales Tax free status is almost mythological in this province. But for a short period of time in Alberta’s history, our province did collect funds through a sales tax.
Alberta’s PST existed for two years until September 1, 1937, when the Social Credit government revoked the sales tax as part of a controversial Great Depression-era Banking bill. The bill would allow the Social Credit Board to revoke the license of any banker, who, for instance foreclosed a mortgage or otherwise disturbed the “property or civil rights” of any citizen of Alberta.
The sales tax, which had a fairly wide range of exemptions such as food, laundry and toilet soap, lumber, bricks and cement, was implemented shortly after William Aberhart‘s Social Credit Party won the 1935 election. The sales tax netted the government an average of $80,000 monthly.
Alberta treasurer Solon Low declared the tax would be cancelled in 1937 as part of the government’s bankers bill. With illusions to the strange Social Credit era economic theory, here were Mr. Low’s comments to the media in response to the end of the sales tax and economic literacy in Alberta in 1937:
“The remission of the sales tax only removed something which, under pressure from finance, this government itself imposed. Nevertheless those instructed in the technique of Douglas social dynamics will immediately recognize signs of its inauguration. In its simpler aspect, of course, tax remission represents the first step necessary to the issue of a dividend – is, in fact the issue of a dividend: for a tax is a dividend in reverse. That is why it would be foolish to begin issuing money as dividends only to pull it in by a graduated an universally applied tax such as a sales tax.”
“As Premier Aberhart has truly said Albertans are the best instructed community in the whole world with regard to economics and if any one desires more detailed explanation of these remarks there are plenty of Albertans everywhere fully qualified to give it and to prove beyond all reasonable doubt that whether the banks furnish the money willingly or otherwise, it will cost them nothing.”
(Quotes from The Ottawa Citizen, August 4, 1937)