Alberta Politics

alberta’s provincial sales tax.

Is a Provincial Sales Tax far off in Alberta?

Despite our political leader’s pledge to ‘never raise taxes‘ (which was made only months after taxes were raised), I have noticed an increasing amount of talk about the merits of implementing a Provincial Sales Tax in Alberta. After the recent drop in the price of oil and natural gas over the past few years, I have encountered many Albertans who have started to talk about where our provincial government gets its revenue and how that revenue source is largely at the mercy of international commodity markets.

How would Albertans react to the introduction of a PST? In 1993, the introduction of the GST was one of the many reasons voters in this province did not support the province’s Progressive Conservative Members of Parliament (including Edmonton MP Murray Dorin, who vice-chaired the parliamentary committee responsible for the creation of the GST).  In 2010, it would be fair to say that most Albertans are comfortable with and have accepted the existence of the GST.

While it is a different form of tax, for years Albertans paid Health Care Premiums that were branded as contributions to the health care system (though they were funnelled into general revenue). When the premiums were cancelled in 2008, it was largely seen as a positive move until people started to realize the billion dollar shortfall that was created.

Tax increases are considered an anathema in politics, but I would bet that a large number of Albertans would be willing to support the introduction of a PST if it meant that our province would have a more secure source of stable revenue to support public programs and infrastructure development.

Update: Alain Saffel also discussed this topic on his blog today. Alain points out that the issue of a PST in Alberta was discussed this morning by Calgary Herald columnist Deborah Yedlin and Alberta Venture editor Paul Marck on CBC’s Edmonton AM program.

18 replies on “alberta’s provincial sales tax.”

I would support a PST if the provincial income tax were reduced by the same amount. Example: Introduce a PST at 5% and and reduce income tax from 10% to 5%. Better yet, introduce a PST of 10% and an income tax of 0%. Then I can CHOOSE whether or not (and when) to pay taxes.

Better yet! Harmonize said PST with the GST, and get a one time big cash payout from Ottawa! Yes, and eliminate the provincial personal income tax. I wonder how many Albertan’s do not pay the income tax?

It seems to me the whole reason the Conservatives are considering this is that they have slashed royalty rates so dramatically they have left themselves with few other options.

Big oil won the fight to get their taxes lowered, now the Tories want the rest of us to pay their ‘fair share.’

A more viable idea would be to re-instate progressive income taxation. This way, the province can raise more money without hurting low-income Albertans. After all, regressive consumption taxes like GST/PST tend to hurt the poor more than the rich.

David MacLean: The the issue of a PST in Alberta was discussed this morning by Calgary Herald columnist Deborah Yedlin and Alberta Venture editor Paul Marck on CBC’s Edmonton AM program. They mentioned that Battle River-Wainwright PC MLA Doug Griffiths has also been talking about a PST. Mr. Griffiths is also the Parliamentary Assistant to Finance Minister Ted Morton in charge of ‘Competitiveness.’

Not wanting to come off like a libertarian or anything, but I have yet to find a government (anywhere) that I trust to levy and properly spend tax revenue.

The fact of the matter is, until the PC government proves that it can be trusted to properly manage existing revenues, adding more revenue is just throwing good money after bad.

@Dave: I’d like to see polling numbers that would reflect that Albertans ‘acceptance’ of the GST is anything but ‘resigned’

Returning to the income tax rates of the pre-flat-tax Klein regime, according to the Parkland Institute, would add $5 billion to provincial coffers. Kevin Taft has also suggested that a return to Lougheed era corporate tax rates would net a few more billion. And since private energy companies have almost nowhere to go to escape higher taxes that an Alberta government might impose, the 2007 royalty review that suggested a $2 billion increase in royalties should still be listened to.

I don’t much support a sales tax or value-added tax because, like medicare premiums, it violates the ability to pay principle every bit as much as a flat tax. But it’s hard to ignore that every social democratic country, including Norway, which both David Swann and Brian Mason like to point to as a model for Alberta social and economic policies,has a stiff VAT (in Norway it’s 25 percent on a wide range of economic transactions).

As long as this government retains the current flat-rate provincial income tax, which puts the richest and the poorest citizens together in the same tax bracket, there is no need to bring in a regressive sales tax. Let us get back to a progressive income tax, then let’s talk.

No taxes will change until the Tories move on to a different leader. Stelmach has said he won’t raise taxes and he’s never flip-flopped on a previous commitment. Look at how he stayed strong after raising the oil royalties!

Taxes were actually cut before the “no new taxes” pledge was made. Anyone pay health care premiums lately? No? Thought so.

Actually Stelmach didn’t raise taxes. He eliminated the health care premium tax – reducing taxes, then pledging not to raise them.

Possible negative impacts for introducing sales tax: low income bracket will be deeply impacted with a sudden increase in percentage of expenses,and the economy could be negatively impacted with increased cost of goods discouraging consumers from purchasing.

The Alberta Provicial flat tax is still subsidized for the low income because there are tax credits that prevent the extremely low income from paying the entire 10%.

Revenues do need to be increased agreeably – but how with out penalizing the poor or economy?

So, the government miss spent millions upon millions of dollars on worthless things while the economy was good, and now that they didnt save for a rainy day, and dont have any money, it’s up to us to use our tax dollars to pay for their squandering of our money? Really? And when exactly do we see the benefit of our tax dollars at work? When we visit a hospital and wait 16 hours in the waiting room until we bleed to death? Or have to wait 2 days for police response? The roads arent maintained? No assistance for people who need it, no rent control to help unfortunate people, no money put in to schools, starving people have no food to eat in our own province, more people out of work than ever before, and we get to pay MORE tax? for what? $1b for G8? We don’t need a new tax, we need new leaders. As it stands now, we had a provincial government with it’s head in the clouds, and a federal government with it’s head up it’s ass. And we, the over worked, under paid, unemployed, surviving but not truly living, get to bail them out with our own money? Anyone else see something wrong with that?

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