February opened with a list of academics and former politicians calling for a provincial sales tax (PST) in Alberta. In an editorial, they declared that with significant royalty hikes off the table that the only option left is another round of massive tax hike on Albertans.
At no point in their proposal did they propose addressing Alberta’s chronic spending problem – a significant lapse.
It will take a greater imagination to get Alberta back on track than simply raising another raft of taxes on Albertans already suffering.
It is true that Alberta faces massive budgetary shortfalls. The NDP inherited a deficit of $6.1 billion from the previous government. Despite raising business taxes by 20 per cent and marginal personal income tax rates by as much 50 per cent, not to mention a slate of other tax increases, the NDP managed to increase the deficit even further through massive spending increases. The 2016 deficit is anticipated to only increase from the $9.1 billion number rolled out in the fall.
These spending increases took place in an environment in which Alberta’s government was already spending $8 billion more per year than British Columbia, which is a high-cost jurisdiction. In short, Alberta’s already bloated government has become even more bloated, just when we can least afford it.
There will always be more good causes to spend public money on. There is no end to how much money can be spent on good things, but there is a point at which spending begins to generate diminishing returns.
For example, Alberta spends more per capita than any province in Canada on healthcare, yet by most measures our healthcare outcomes are below the national average. If money were the solution, Alberta would have the best healthcare in the world.
Our government has been comfortable to merely throw more money at problems since the mid-2000s; but that was during a time of high oil & natural gas prices, and when Alberta had no debt and a huge rainy-day fund to fall back on. Oil and gas prices have since plummeted, we are significantly indebted once again, $17 billion in contingency savings is gone, yet spending has not been corrected.
When the NDP introduced a raft of new and higher taxes in June, they also increased spending by an even greater sum. When the NDP imposed a new $3-billion carbon tax on Albertans, they committed to spending the vast majority of it.
Taxes have gone up, spending has gone up, and the deficit has gone up.
Advocates for a PST may be well intentioned, but I am sceptical that the revenue generated by it would go to anything but lead to another expansion of provincial government spending.
Alberta does have a revenue problem: it misspends far too much of its revenue and has proven that more of it is never enough.
Wildrose is the only party committed to a real reduction in government expenditures with a focus on front-line service delivery, to bring Alberta closer in line to the national average.
Albertans need their government to take real action to get spending under control, stimulate economic growth, and thus create jobs. Still higher taxes will not do any of these things.
But discipline, innovation and the Alberta’s entrepreneurial spirit will.