A billionaire is moving away from Calgary and we should all be worried, the newspapers tell us. Postmedia newspapers reported recently that nameless sources are saying oil billionaire and Calgary Flames co-owner Murray Edwards is “switching his residency to the U.K. for tax reasons.”
Alberta has some of the lowest taxes in Canada and remains the only province without a sales tax. It has been speculated that a billionaire like Mr. Edwards would only pay about 3 percent less tax in the United Kingdom. But the billionaire’s alleged economic refugee status fits nicely into the editorial narrative of the Postmedia newspapers and the political agenda of the Wildrose Party opposition, who immediately blamed Alberta’s New Democratic Party government for Mr. Edward’s relocation.
In May 2015, Albertans elected an NDP government that ran on a platform clearly stating that billionaires should not be in the same tax bracket as average Alberta taxpayers. Even the party that earned the second most votes in last year’s election, the former governing Progressive Conservatives, planned to cancel the 10 percent flat tax and increase taxes for high income earners up to 12 percent if they were re-elected.
One of the first laws the NDP passed after it formed government scrapped the flat tax that the PC government introduced in the early 2000s. Personal income tax rates for high income earners, like billionaires, were increased to 15 percent for annual income above $300,000.
We continue to hear plenty of rhetoric about the decline of the “Alberta Advantage” but the reality is the biggest economic and financial advantage our province has only exists when the international price of oil is high. When oil prices drop and natural resource royalties are low, our artificially low tax rates are unrealistic if we want to sustain the public services that contribute to the high quality of life we enjoy in Alberta.
The government needed to generate revenue and increasing personal income tax rates is a basic way to do that, though it still remains unclear if anyone in government or opposition has a plan to actually get Alberta off the oil roller coaster.
But enough about Alberta. Back to the billionaire.
No offence, Calgary, but it could be that as a billionaire Mr. Edwards wants to live in a large international city like London that is home to a large billionaire community. While being a billionaire in London comes with billionaire-specific problems, I imagine a major European city can offer a lifestyle that a city in western Canada cannot.
There could be private personal motivations for the move. Until the media actually speaks with him about his move, all coverage is just speculation.
If he is indeed relocating, I hope Mr. Edwards enjoys his stay in London. I might even join him there if I one day become a billionaire. And if I do, it probably would have less to do with the taxes and more to do with London being a great city to live in, especially for billionaires.