Business Council of Alberta calls for increased taxes, less spending

A new policy paper from one of the province’s leading business groups urged the UCP government to find ways to increase revenues and lower spending.

The week before Finance Minister Travis Toews drops his spring budget, the Business Council of Alberta (BCA) made the case for Alberta instating a harmonized sales tax and bringing back the consumer carbon tax. The measures would shore up revenue stability in the province’s hard-hit coffers, the group argued.

Alberta spends 11 per cent more per person on services than other provinces do on average, but it brings in seven per cent less in tax, per BCA.

“Alberta has a serious problem,” BCA president Adam Legge said in a news release. “For decades, governments have spent too much, and collected too little in taxes, because we could make up the difference with resource revenues. We can’t count on that in the future, and our trajectory is unsustainable.”

While the UCP ran on a promise to repeal the carbon tax, a future sales tax might not be entirely out of the question.

However, Premier Jason Kenney said a sales tax surprise won’t be coming in next week’s budget. He told reporters now is not the time for the government to dip its hands into people’s pockets, but he pledged to launch a revenue review panel closer to the next election.

While the BCA does not oppose the UCP’s accelerated corporate income tax cut, it said the government needs to quash Albertans’ overall resistance to taxation, calling it an “outdated mythology.”

“If we don’t take reasonable steps now to solve this [revenue] problem, we are mortgaging the future of our children and our province, and we will need to take more severe action in the years ahead,” Legge said.

The paper does not delve into spending cuts, citing the UCP’s MacKinnon panel report as a more detailed set of recommendations.

The spring budget will feature record levels of spending on health care and “economic recovery,” Kenney said. The fiscal document will also focus on making the province operate “more efficiently.”

“We’re never going to cut our way out of the deficit we inherited,” Kenney said.

Among the items expected in the budget is a three per cent cut to public sector workers’ salaries.

Yesterday, Minister Toews weighed in on a recent AUPE complaint to the Labour Board, contending the public sector union wants $200 million more in wages. He said “compensation efficiencies” are needed to maintain services levels and that the government will negotiate to reach a collective agreement with the union that “reflects the province’s current economic and fiscal reality.”