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Premier Prentice, a Sales Tax Won't Fix Alberta's Mess

There are more progressive ways to address our resource and financial mismanagement.

Dave Hubert 28 Jan 2015TheTyee.ca

Dave Hubert is an Alberta resident with a lifelong passion for social justice. He is the current executive director of Canadian Peacemakers International.

I am deeply opposed to the idea of a provincial sales tax and the following demonstrates why. I find the present deficit of the Province of Alberta embarrassing and depressing. It pains me deeply that we Albertans, by and large a decent and compassionate folk -- and to judge by our response to the floods in Southern Alberta, a generous people -- have permitted this situation to develop. We are only debating a sales tax because we have mismanaged our resources and financial affairs so badly.

Alberta is the wealthiest province in Canada, one of the richest countries in the world. But our public services are deteriorating with each passing year. The current pain our K-12 and post secondary education systems are experiencing is inexcusable. These cutbacks will harm Alberta for many years to come. The cutbacks to services for seniors and the handicapped are inhumane. Every time I travel to Fort McMurray on Highway 63, or drive across the potholed roads of Edmonton, even in industrial subdivisions that service the oil patch, I am jarred into the realization that something is rotten in the Province of Alberta. All of these examples -- and many more could be cited -- indicate that Alberta needs a different approach to public finances.

Yet when I drive around newer neighbourhoods in Edmonton and Calgary, and indeed smaller cities and towns in Alberta, I see many monster houses, and more being built. Many of these houses have three or four-car garages, with more than a few Escalades and Hummers parked on the driveways. When I compare the vehicles on the roads of Edmonton and Calgary to Winnipeg, I realize that wealth in Alberta is different by an order of magnitude from other provinces. Alberta is very wealthy province.

Follow the money

This is borne out in the book Follow the Money: Where Is Alberta's Wealth Going? by Kevin Taft, a highly respected policy analyst and former leader of the Alberta Liberals.

The Statistics Canada data in Taft's book show that corporate profits per capita in Alberta were 3.65 times higher than in the rest of Canada in 2008. In the 20 years leading up to 2009, the funds allocated to health care, K-12 education and post-secondary education increased by 28.6 per cent, 2.4 per cent and 27.9 per cent respectively, while corporate profits increased 317.2 per cent.

When I asked Taft if the upward trendlines of the data in his book had continued since 2009, the last year the data was available for his research, he told me that Statscan had stopped producing the information. Does your government collect the data needed to answer this question? To make informed, sound decisions, it is critical that such data be available. I believe evidence-based decision making is superior to ignorance-based decision making.

Taft's book indicates there is much room to increase taxes while still retaining Alberta's position as the most profitable jurisdiction in Canada in which to do business. A modest surtax on these profits could immediately eliminate the provincial deficit while enabling the province to maintain essential services. Business owners will not leave Alberta if profits drop to 2.65 times higher than in other provinces.

A few more prudent policies

Further, it is clear that the 10 per cent flat income tax introduced by the Klein government in 2001 is a failed experiment. For the health of the province's finances, it is important that a progressive income tax be reinstated. As well, a graduated inheritance tax on estates over $2,000,000 would also raise much needed public revenue.

Reinstating the progressive income tax, introducing a graduated estate tax, and placing a modest surtax on profits could raise huge annual revenues for the government and still permit Alberta to retain its status as the lowest taxed jurisdiction in Canada. This strategy would also permit Alberta to again grow the depleted Heritage Trust Fund. I believe many, many Albertans would agree that these would be prudent policies for the Government of Alberta to adopt.

I have lived in Alberta for more than 72 years and have worked and paid taxes for more than 50. I have never received public assistance or employment insurance. I have not missed a day of work due to illness since 1966 and have not spent a day in hospital since 1958, and I was an enthusiastic supporter of Peter Lougheed when he became premier in 1971. I strongly favour fair taxation and increasing taxes so adequate, essential public services can be maintained for all Albertans.

Looking forward to your response on this matter of urgent public interest,

Yours truly,

Dr. Dave Hubert
A concerned Albertan  [Tyee]

Read more: Energy

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