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No provincial sales tax the gift that keeps on giving

Canadian Taxpayers Federation estimates at least $184 million in taxes saved by Albertans through holidays

Christmas season shoppers in provincial-sales-tax-free Alberta saved big compared with holiday spenders in the rest of Canada.

The Canadian Taxpayers Federation crunched some numbers in support of the province’s longstanding opposition to a provincial sales tax.

Using U.S.-based National Retail Federation data, Canadians could be expected to spend about $1,137 (US$832.84) on gifts and supplies during the winter holiday season. That is just short of the 10-year average of $1,127 (US826.12).

“As we braved the cold to buy our toys, candy and decorations this Christmas, we can be happy we don’t have a PST in Alberta, or it would’ve cost us a lot more,” said Kris Sims, Alberta director for the Canadian Taxpayers Federation.

“Albertans are saving about $80 each this holiday season because we aren’t paying seven per cent PST.”

That works out to $184 million that was not collected in taxes and remained in Albertans’ pockets.

Sims said the motivation for her financial figuring was to ensure a provincial sales tax remains in the public debate.

However, the goal is also to celebrate the province’s status of being the only one without a provincial sales tax.

As one of the more than 6,000 British Columbians who moved to Alberta this year, Sims said Alberta’s lower taxes are a welcome surprise at the till. “It’s something I’ve noticed.”

Sims said it’s a story that deserves to be told and using Christmas spending provides a tangible example most can relate to.

“Sometimes I think it can be taken as granted, not having a PST. When we have that savings across Alberta for our shoppers, I think it’s important to point it out because other folks don’t have those savings.

“I think that’s one of the reasons Alberta has an advantage.”

In the Atlantic provinces, where there is a 15 per cent Harmonized Sales Tax (combined five per cent GST and 10 per cent provincial tax), each shopper shells out $113 in provincial taxes over the holiday season. Using half of the population as a benchmark, the total amount collected in provincial sales tax is $144 million.

Sims, who spent a great deal of time doing the number crunching, said they are estimates because not all provinces apply the PST the same way, which complicates any calculations. Using only half the population ensured estimates of tax revenue were very conservative, she said.

“We low-balled it. Imagine only half the population shopping? I tried to be as conservative as possible.”

In Ontario, where the provincial tax is eight per cent, the additional cost is $90 per shopper, or $675 million using the half-population participating standard.

Quebec’s 9.9 per cent provincial sales tax means an extra $112 in holiday spending and $470 million in tax revenue; Manitoba (seven per cent PST) would be $80 more and tax revenues of $55 million, Saskatchewan (Six per cent PST) would be $68 per person extra generating $40 million and B.C. (seven per cent PST) they will pay about $71 each, collecting $188 million for the government.

The taxpayers federation has long lobbied provincial politicians to maintain Alberta’s provincial tax-free status.

In the United Conservative Party leadership race, the federation got every candidate to sign a pledge not to impose a PST or raise taxes.

“All of them signed, including the current premier.”

The federation was also behind the Taxpayer Protection Act, which requires the government to hold and win a referendum before adopting a provincial sales tax.

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