Tag Archives: Ending Child Poverty in Canada

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.

Child poverty a problem worth eliminating in wealthy Alberta

November 24, 2014 marked 25 years since members of the Canadian Parliament voted unanimously to end child poverty in our country. The motion introduced by then-NDP leader Ed Broadbent supported abolishing child poverty in Canada by the year 2000.

Twenty-five years later, we are far away from reaching this goal.

Although Alberta has benefited from rapid economic growth, not everyone has shared in this prosperity. The Edmonton Social Planning Council, Alberta College of Social Workers and Public Interest Alberta released a new report on Nov. 24 showing that 143,200 children in our province lived below the low-income measure in 2012.

Alberta Child PovertyThe numbers in the report are depressing but important to recognize. According to the report, the percentage of Alberta children living in poverty is essentially unchanged since Mr. Broadbent’s motion was passed in 1989.

Unemployment is not necessarily the main cause of child poverty in Alberta. The report shows that in 2011, a record high of 59.2% of children in poverty lived in a household where one or more persons were working full-time job.

According to the report, Alberta’s income inequality has increased faster than the national average, with the top 1% of earners seeing real income increases of over 60% since 1982 while the bottom half of income earners only saw a small increase of 3.4%.

The report also shows that in March 2014, more than forty-nine thousand Albertans accessed food banks, an increase of 2.3% from  2013 and 48.2% higher than in 2008.

The recent Homeless Count found 2,252 people without a home in Edmonton, an increase of 3.5% from 2012. The number of youth increased by 17% from 481 to 562. Of all those counted in the survey (including non-youth), 47% identified as being of Aboriginal heritage.

But despite an intense political focus in Alberta on low taxes and oil pipeline expansion, the discussion around income-inequality and eliminating poverty has gained some attention in recent years.

Poverty Parents Working Alberta

In March 2014, Edmonton Mayor Don Iveson named a task force on Poverty Elimination to develop a plan with recommendations to eliminate poverty in the city.

“There are over 100,000 Edmontonians living below the poverty line, 30,000 of whom are children. For me, that is not acceptable,” Mr. Iveson said in a press release earlier this year.

Speaking to a group of Edmontonians during a break from budget hearings last week, Mr. Iveson explained some of the ways Edmonton can help contribute to the reduction of child poverty through public library education programs and reduced-fee transit passes for low-income parents.

“Poverty elimination will be the result of good prevention,” Mr. Iveson said, as he explained the need for a renewed focus on the social determinants of health.

“If we don’t deal with some of those things proactively they can become policing challenges, which is the most expensive thing we do,” he said.

As city governments are limited in their resources compared to provincial and federal governments, he spoke to the need for municipalities to pressure MLAs to make much needed funding increases to Family and Community Support Services.

During the 2012 election, Progressive Conservative leader Alison Redford promised the creation of a ten year strategy to end poverty in Alberta, which would include a five-year plan to eliminate child poverty and a plan to address the root causes of poverty. Following Ms. Redford’s departure, it is suspected that a strategy will not be released until next year. But it remains unclear how Premier Jim Prentice will approach this issue.

Despite our prosperity, Mr. Prentice is pleading poverty due to slightly deflating world oil prices and is already suggesting education funding cuts are likely in next year’s budget.

It is shameful that child poverty in Canada still exits in 2014, twenty-five years after every Member of Parliament stood and committed to eliminating it by 2000. And in a wealthy and prosperous jurisdiction like Alberta, where we have the financial means and ingenuity to ensure every resident can live outside of poverty, there is no excuse why child poverty still exists.

Read the reportNo Change: After 25 years of Promises it is Time to Eliminate Child Poverty.

Listen: Ed Broadbent’s interview with CBC’s The Current on the 25th anniversary of the motion to end child poverty