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)
4 replies on “Once upon a time Alberta had a Provincial Sales Tax”
1. These people were in charge. Never, ever, assume that the person in charge has the first clue what they’re talking about.
2. Never, ever trust a person who makes a claim, and rather than defending it with logic, pays you a compliment you don’t deserve implying you already agree with it.
3. Popular opinion, therefore, is capable of massive, insightless stupidity. Distrust your own understanding.
But you already knew those things, because Albertans are the most cynical and logical polity on the planet.
I haven’t lived in Alberta for 50 years but I have lived just across the border watching it. My mother’s family settled in the Peace country in 1882 as missionaries and my father’s family settled in the Cypress Hills in 1892 so I am truly interested. My father was horrified at how the province gave away its riches to the oil corporations and I think a sales tax will cause great resentment but the people will have to suck it up because they have allowed themselves to be brainwashed and manipulated by the petroleum industry in the cause of ‘free enterprise’ and have no one to blame but themselves.
I used to think it was the most beautiful place on earth but great parts of it have been trashed and poisoned.
I’m not from Alberta (beautiful province, especially for ski!), and I’m fascinated that, like many other places, the word ‘tax’ has become a dirty word.
Granted, it brings up the image of government waste etc. and that needs to be dealt with for sure.
But like all things, there is a balance. Obviously, Alberta is not about to be taxed like Quebec. That’s not what I’m saying.
But a moderate provincial sales tax in order to reduce the deficit seems reasonable.
Or do Albertans believe in no taxes, everyone fend-for-themselves approach?
It reminds of Libertarians: they flush their toilet, use public roads, send their kids to school, go to the hospital when they need health care… but they don’t want to pay taxes.
Having spent my working career in the production of oil 7 gas in all facet’s I would like to make a few observations.
1. The Province has been built from the ground up since Leduc in the 40’s with the revenue from oil & gas. This was a new country no roads, schools or medical resources to speak of. We now have a great province and look at the benefits we enjoy. We have also financed the rest of Canada in equalization payments and Fed. Taxes. Don’t bad mouth the Oil industry, buy some stocks if you think it is an endless amount of wealth.