Alberta Politics

Prentice amending the budget on the fly as polls suggest PC Party in trouble

This was supposed to be an election campaign about the provincial budget, or at least that is what Progressive Conservative leader Jim Prentice told Albertans when he called the election one year earlier than the legislated fixed election day.

Despite ignoring the results of own government’s online budget survey, Mr. Prentice and his party plotted forward with their own pre-election budget and “10-year plan,” which was designed to also serve as the PC Party’s re-election platform. Mr. Prentice claimed he needed to call the early election to seek a mandate for a budget that would usher in “generational change” but that same budget is now being amended on the campaign trail.

Mr. Prentice announced today that, despite weeks of defending the decision, he will reverse the unpopular decision to slash the Charitable Donations Tax Credit included the budget. Cutting tax credit for charitable donations from 21% to 12.75% was expected to have dramatically impacted the abilities of not-for-profit organizations and charities to raise funds.

[Note: The generous tax credit for donations made to political parties was not touched.]

While reversing the cut to the charity tax credit is positive, it is disappointing that his party’s plummeting support in the polls was the apparent impetus for Mr. Prentice’s reversal. Cutting the charity tax credit was a bad decision from the beginning. If the polls continue to show the PC Party in a tough electoral position, it now might not be unexpected for Mr. Prentice to reverse more decisions that only a few weeks ago were set in stone in the provincial budget.

The charity tax credit flip flop is eerily reminiscent of what Albertans witnessed under the PC Party recently led by Alison Redford from 2011 to 2014. Numerous times during her premiership, Ms. Redford would make an unpopular decision and spend weeks defending her position only to change her position after it had already damaged her politically (see: the $45,000 flight to South Africa).

Now that Mr. Prentice has reopened the provincial budget for discussion, here are a few other items that the PC Party should consider changing:

Edmonton-Castle Downs PC candidate Thomas Lukaszuk is calling for increases to the Corporate Tax Rate, breaking from his party’s spin that each 1% increase in corporate taxes would lead to 8,900 job layoffs. Mr. Prentice has called NDP leader Rachel Notley an “extremist” for wanting modest increases to corporate taxes in Alberta. It is unclear whether Mr. Prentice will now label Mr. Lukaszuk as an extremist.