Tag Archives: Alberta Corporate Tax Rate

Episode 38: Students get a pay cut and big corporations get a tax cut

The cut to minimum wage for Alberta students under the age of 18 and cuts to corporate income taxes are the big topics discussed by Dave Cournoyer and guest co-host Brad Lafortune on this episode of the Daveberta Podcast.

We also discuss Attorney General Doug Schweitzer’s decision to appoint a special prosecutor to advise police investigating allegations of voter fraud in the 2017 United Conservative Party leadership race. And we answer some great questions shared by our listeners.

The Daveberta Podcast is a member of the Alberta Podcast Network powered by ATB Financial. The APN is asking podcast listeners to participate in their annual listener survey, so please do so if you are so inclined.

You can listen and subscribe to the Daveberta Podcast on Apple PodcastsGoogle PlaySpotifyStitcher, or wherever you find podcasts online. We always love to feedback from our listeners, so let us know what you think of this episode and leave a review where you download.

You can also comment on the blogFacebook or Twitter or send us an email at podcast@daveberta.ca.

Thanks again to our talented producer, Adam Rozenhart, for making us sound so great.

Thanks for listening!

Note: The Daveberta Podcast will be taking a break for the next few weeks as Dave and Adam go on vacation with their families. We will be back on July 15!

Recommended Reading/Listening

Tax On, Tax Off: Kenney calls for tax cuts for corporations, Greens call for PST in Alberta

United Conservative Party leader Jason Kenney says his party will cut Alberta’s corporate income tax down to 8 per cent from 12 per cent, which would give Alberta by far the lowest corporate taxes in Canada. Alberta’s current corporate income tax rate for corporations earning more than $500,000 in annual income was increased from 10 percent to 12 per cent by Rachel Notley‘s New Democratic Party government after the 2015 election.

Jason Kenney Alberta Politics

Jason Kenney

Kenney’s call to cut corporate income taxes is not surprising, as his party sees significant cuts to both taxes and government spending as a solution to the Alberta government’s fiscal woes.

Kenney’s ideological aversion to taxes and public spending in general is well known going back to his time as a spokesperson for the Canadian Taxpayers Federation more than 20 years ago.

Next to the criminal law power that we wield in Parliament, the power to collect taxes is the most significant and potentially destructive power. Some have said that the power to tax is the power to destroy,” Kenney said as a Reform Party MP in Ottawa in December 1998. 

Lowering the corporate income tax this low is not an original idea, but it is unclear what advantage cutting corporate income taxes this low would really give Albertans.

The Alberta Corporate Tax Amendment Act introduced by Revenue Minister Greg Melchin in 2002 set a target of 8 per cent for the corporate income tax rate, but the Progressive Conservative government never let the rate dip below 10 per cent.

Kenney has also pledged to repeal the provincial government’s carbon tax, cut the minimum wage, and has mused about cutting personal income taxes for those paying into the highest tax brackets by reimposing the 10 per cent flat tax.

Joel French Alberta

Joel French

Notley’s promise to increase corporate income taxes in 2015 to fill the gap left by plummeting oil and gas royalties led to the most notable exchange in that election’s leaders’ debate, when PC Party leader Jim Prentice got in trouble for sharply responding to Notley’s that “I know math is difficult.” The “math” comment was received poorly, to say the least, and the reaction from Alberta’s corporate leaders helped the NDP soar in the polls until election day.

Albertans gave this government a strong mandate to act on its promises: That was to ask top-income earners to pay a little bit more for the betterment of all and to ask corporations who benefited the most during stronger economic times to contribute fairly to rebuilding our province,” Finance Minister Joe Ceci told the Globe & Mail shortly before the corporate income taxes were increased in 2015.

It is notable that even under Notley’s NDP government, Alberta’s corporate income taxes today are still lower than the 15.5 per cent they were when Ralph Klein became Premier in 1992 (which was then the third-lowest corporate income tax rate in Canada). Notley’s NDP also lowered the small business tax rate from 3 per cent to 2 per cent, which is also significantly lower than the 6 per cent rate when Klein became premier. But this is not necessarily something to brag about in a province that continues to struggle with its chronic over-reliance on royalty revenues.

As noted by Public Interest Alberta executive director Joel French in a May 2018 opinion-editorial in the Edmonton Journal, “Applying the tax system of any other province to Alberta would raise us a minimum of $11.2 billion in additional annual revenue, more than covering the projected $8.8-billion deficit in this year’s budget.

With a young and growing population, slashing the corporate income taxes that help fund the day to day operations of government, like the public education and public health care that Albertans depend on to preserve our high quality of life, sounds short-sighted.

With a lack of policy proposals and campaign promises coming from the NDP during this pre-election period, this is another example of Kenney and the UCP dominating the media coverage going into the provincial election.

Carl Svoboda Green Party Alberta Calgary Edgemont

Carl Svoboda

Meanwhile, the Green Party of Alberta has strapped itself to one of the third rails of Alberta politics by calling for the creation of a Provincial Sales Tax. Many political watchers and economists have called for the creation of a sales tax to help diversify the government’s revenue sources, but politicians of all stripes have been extremely reluctant to take a position in favour of a PST in Alberta.

The other parties are terrified to mention a sales tax other than to denounce it, but the Green Party is not. It is time for Alberta to start acting like a normal province and bring in a sales tax,” said Green Party public finance shadow critic Carl Svoboda, who is running in Calgary-Edgemont.

In another political universe, this might have been something championed by the NDP, but not in Alberta in 2019.

With no MLAs in the Legislature, the Alberta Greens may have little to lose by calling for the creation of a PST, but by taking this position they do open the door to a much-needed PST debate a little bit wider.

Child poverty in Alberta drops by half in two years

Alberta has the lowest child poverty rate in the country at 5 per cent, having managed to cut its rate in half in just two years, between 2015 and 2017. University of Calgary economist Ron Kneebone told The Star Calgary that the the national Canada Child Benefit and the Alberta Child Benefit were the biggest reasons for this improvement.

Elizabeth May comes to Alberta

Speaking of the Green Party, federal Green Party leader Elizabeth May will visit Alberta later this week with stops in Calgary on March 7 and Edmonton on March 8, 2019.

Thousands of Albertans packed the Legislature Grounds to watch Premier Rachel Notley and the NDP cabinet be sworn-in.

What new laws did Alberta’s NDP Government pass in 2015?

The fall session of the Alberta Legislature ended last week and MLAs will now spend the next few weeks working in their constituencies until the Assembly returns in early 2016. The Assembly passed nine pieces of legislation introduced by Alberta’s New Democratic Party government in its first full session of the Legislature since it formed government.

The first four bills introduced by the government reflected key promises made by Rachel Notley‘s NDP during the 2015 election. One private members bill, introduced by Independent Calgary-Bow MLA Deborah Drever, was passed by the Assembly (a rare feat for opposition MLAs).

Here is a quick look at the ten bills that were passed by MLAs since the NDP formed government in 2015:

Kathleen Ganley NDP Calgary Buffalo

Kathleen Ganley

Bill 1: An Act to Renew Democracy in Alberta

Introduced by Justice Minister Kathleen Ganley, Bill 1 banned corporate and union donations to provincial political parties in Alberta. The bill received royal assent on June 29, 2015, but was made retroactive on June 15, 2015. This new law was a major blow to the Progressive Conservative Party, which had become accustomed to relying heavily on corporate donations to fund their campaigns and operations. The ban was not extended to municipal elections.

Bill 2: An Act to Restore Fairness to Public Revenue

Introduced by Finance Minister Joe Ceci, Bill 2 eliminated Alberta’s 10 percent flat tax and introduced a progressive taxation system with five rates of personal income tax up to 15 percent for income above $300,000. Bill 2 also increased Alberta’s corporate tax rate from 10 percent to 12 percent, bringing our province in line with Saskatchewan and Manitoba. Despite the increase, tax rates in Alberta still remain lower than what existed during much of the time Ralph Klein served as Premier.

Joe Ceci Calgary NDP

Joe Ceci

Bill 3: Appropriation (Interim Supply) Act, 2015

Introduced by Mr. Ceci, Bill 3 reversed funding cuts made to education, health care, and human services by the PC government before the May 5, 2015 election.

Bill 4: An Act to Implement Various Tax Measures and to Enact the Fiscal Planning and Transparency Act

Introduced by Mr. Ceci, Bill 4 repealed and replaced the Fiscal Management Act and introduced requirements in a Fiscal Planning and Transparency Act, which include presenting government finances in a three-year fiscal plan and the establishment of a new debt cap based on a debt-to-GDP ratio of 15 percent.

Bill 5: Public Sector Compensation Transparency Act 

Introduced by Ms. Ganley, Bill 5 expanded the “sunshine list” to include employees of public agencies, boards, commissions, post-secondary institutions and health service entities whose earnings are more than $125,000 annually. This is a continuation of work already done by the previous PC government and has been criticized by supporters of the NDP as “bad policy.”

Lori Sigurdson NDP

Lori Sigurdson

Bill 6: Enhanced Protection for Farm and Ranch Workers Act

Introduced by Jobs, Skills, Training and Labour Minister Lori Sigurdson, Bill 6 introduced occupational health and safety and mandatory Workers’ Compensation Board coverage for employees of farming operations. Alberta is currently the only province in Canada without OH&S laws and employment standards coverage for farm and ranch workers. Amid protests by farmers and ranchers, the government introduced amendments to exempt farm and ranch owners and their families from the bill. This was undoubtably the most controversial legislation passed by the NDP government in 2015.

Bill 7: Alberta Human Rights Amendment Act, 2015

Introduced by Ms. Ganley, Bill 7 amended the Alberta Human Rights Act to add gender identity and gender expression as expressly prohibited grounds of discrimination.

David Eggen

David Eggen

Bill 8: Public Education Collective Bargaining Act

Introduced by Education Minister David Eggen, Bill 8 restructures collective bargaining between teachers, school boards and the government. The bill initially would have had the government be the sole party negotiating with the Alberta Teachers’ Association on matters that should be bargained centrally versus locally but an amendment to the bill allowed a new employer bargaining association to negotiate with the ATA to decide.

Bill 9: Appropriation Act, 2015

Introduced by Mr. Ceci, Bill 9 provides budget funding authority to the Government of Alberta and the Legislative Assembly for the 2015-16 fiscal year.

Deborah Drever MLA Calgary Bow

Deborah Drever

Bill 204: Residential Tenancies (Safer Spaces for Victims of Domestic Violence) Amendment Act, 2015

Introduced by Ms. Drever, Bill 204 amended the Residential Tenancies Act to allow victims of domestic violence to end their housing leases early and without penalty in order to leave unsafe home environments. Lethbridge-East MLA Maria Fitzpatrick bravely stood in the legislature to share a powerful story about her personal experiences with domestic violence.