Recommending a provincial sales tax shows that the Business Council of Alberta is absolutely tone deaf to the struggles of Albertans, says the Alberta director with the Canadian Taxpayers Federation.
“Do these executives really think Albertans are going to have money lying around after five plus years of economic hardship — which includes restrictions, lockdowns, collapsing oil prices and a pandemic — to pay for a sales tax and other tax hikes? asked Franco Terrazzano, Alberta director with the federation.
“It’s so out of touch and it’s just so tone deaf coming from a group of Alberta executives.”
This week the business council’s policy paper Towards A Fiscally Sustainable Alberta, A Review of Provincial Government Finances suggested an eight per cent harmonized sale tax (HST) would net the province about $8 billion, with $800 million in HST coming from visitors.
“Albertans face the lowest tax burden in Canada, meaning that we can explore options such as an HST without compromising our competitive advantage,” the report said.
“In stark contrast with resource royalties, it is one of the most stable sources of government revenue.”
It would also be easy to protect low-income Albertans through a rebate system, like the one that already exists with the GST, the report said.
Terrazzano said a sales tax would cost each Albertan $1,600 and few have the extra cash. The province should instead reduce its budget.
“There’s so many areas of our own budgets that we’ve cut back, so the governments should be able to do the same thing, especially when you consider just how big the spending problem is — $10 billion every single year.”
Getting rid of corporate welfare for the petrochemical sector is just one example, he said.
“Premier Kenney, he has talked for a long time about how government should not be in the business of business. Well it’s time to take government out of that business, and it’s time to stop having politicians playing investment banker with our tax dollars.”
He said thankfully this week Kenney immediately rejected the idea of a sales tax.
“Other provinces have sales taxes, but that doesn’t make their budget challenges go away. It’s wrong to think that just because you bring in new taxes, the government is going to be able to balance the budget,” Terrazzano said.
Rick More, Red Deer & District Chamber of Commerce CEO, said the Alberta Chamber of Commerce will likely develop a policy on sales tax in the future, but right now “there’s bigger fish to fry” with the pandemic.
“We’ve got to get through 2021,” More said.
He said there’s a lot of anxiety among business owners and a clear fiscal plan from the UCP would help.
“We do need a road map. People want to see a plan to cancel some of the uncertainty.”