daveberta.ca - Alberta Politics and Elections

As the Alberta New Democratic Party passes the half way mark of their first four-year term in office and the United Conservative Party chooses its next leader, a big question that remains unanswered in Alberta politics today is how, in the long-term, the Alberta government plans to deal with the revenue shortfall created by the drop in the international price of oil.

After decades of rich oil and gas royalties pouring into public coffers, the Alberta government became over-dependent on oil and natural gas royalties to pay for a large portion of the daily operations of government.

The old Progressive Conservative government led by Ralph Klein used those high royalty revenues to subsidize corporate and personal tax cuts, which proved politically popular in the short-term but fiscally irresponsible in the long-term. When the international price of oil dropped in 2014, so did about $10 billion worth of expected government revenue that the PCs were depending on.

After their election in 2015, Rachel Notley‘s NDP took steps to diversify government revenue with moderate increases to corporate and personal taxes. Even after those increases, Albertans still pay some of the lowest taxes in Canada and those increases were nowhere enough to fill the revenue shortfall.

The positive news is that Alberta’s economy is recovering, but unless the international price of oil recovers, the government will remain in a deficit situation for the foreseeable future.

While I support Notley’s smart choice to continue investing in public services and capital infrastructure projects during the course of the economic recession, it is not clear that the NDP have a real plan to deal with Alberta’s revenue challenges in the long-term.

It is unlikely that the government will revisit Alberta’s comparatively low royalty rates anytime soon, and the NDP appear unwilling to start a discussion about introducing a provincial sales tax, at least until after the next election. A sales tax could help alleviate the government revenue problems and would be smart move for the province in the long-term.

It is an odd sight to read Finance Department documents that both lament a large budget deficit and boast about low taxes. The NDP inherited one big bad habit from the old PC government and have been unable to break from it.

But if you think the candidates for the leadership of the new United Conservative Party are coming up with new, bright ideas for Alberta’s long-term future, think again. Political rhetoric about returning to the mythical “Alberta Advantage” and calls for drastic cuts to both government spending and revenue are mostly what Jason Kenney, Brian Jean and Doug Schweitzer have proposed.

It is meat for the party base, but not exactly inspiring plans for Alberta’s future.

I get the impression that while they are playing from different sides of the political spectrum, both the NDP and the UCP’s prospective leaders are praying that oil prices recover enough to avoid having to raise taxes or slash the budget to shreds.

Alberta has a revenue problem. And the sooner someone is willing to “take the tax bull by the horns,” as my colleague David Climenhaga wrote, and begin planning for a more sustainable government revenue stream, the better off future generations of Albertans will be.

Schweitzer wants to lower the minimum wage

Doug Schweitzer says he would cut Alberta’s minimum wage from $15 per hour to $12.20 per hour, because it is “right choice for Albertans whose livelihoods count on it the most.”

While he is likely referring to the livelihoods of business owners, it would be the wrong choice for the people impacted the most – the lowest wage working Albertans who would have their wages cut from $15 per hour to $12.20 per hour.

It is safe to say that Schweitzer has earned much, much more than $12.20 per hour at his downtown Calgary job as a partner at Dentons, the world’s largest law firm.