A tax hike by any name

Back in 2009, then-premier Ed Stelmach made good on an election promise to kill the Alberta health-care premium. When he did it, the savings to Albertans was the equivalent of a 12 per cent cut in income taxes.

Back in 2009, then-premier Ed Stelmach made good on an election promise to kill the Alberta health-care premium. When he did it, the savings to Albertans was the equivalent of a 12 per cent cut in income taxes.

With a big energy-based revenue problem on Premier Jim Prentice’s hands, and having already ruled out a sales tax, or any increases in income taxes and corporate taxes, there’s not much revenue room to make a significant move on the revenue side of his next budget. Royalty fees are so far off the table as to never be mentioned.

But dress up a huge spike in income taxes as a health-care premium and you’re talking significant dollars.

Finance Minister Robin Campbell is tickled pink with the idea. “I’m keen on it,” he told reporters after a speech on Wednesday to the Chamber of Commerce in Chestermere.

Both he and Prentice seem convinced that a steep hike in taxes via health-care premiums is the preferred option of Albertans for the next difficult budget. In fact, it’s a done deal.

“It would be based on per-person,” said Campbell. “I’m just not sure yet how we’ll bring it in.”

That sounds like a bit more than a Klein-era trial balloon, don’t you think?

Health-care premiums are just another flat tax. If you’re making six figures, what’s $1,000 per year? You can live with it. But if you’re the lone breadwinner with a family, a per-person health premium could see an average wage earner missing mortgage payments.

Last time out, the health premium experiment turned out to be a total joke. There was almost zero revenue for the government, because the feds ruled the fees to be a violation of medicare rules, and they cut provincial tax transfers by an equivalent amount — for years.

In fact, doing so cost us billions, because those transfers were Alberta federal income taxes withheld, so for us to get health care, we had to pay twice.

A lot of people couldn’t (or simply wouldn’t) pay. If you believe the Liberal critics, some were chased by bill collectors. Then came the ethical choices health-care providers needed to make when sick people came to their doors.

Do you provide health care to someone whose premiums aren’t up to date? Do you let them die, in the same way some U.S. municipalities let people’s homes burn down if they haven’t paid their fire protection premiums?

Why is Prentice, the governor of the lowest-taxed, highest per-capita spending regime in the developed world, so afraid of charging a reasonable tax rate for a reasonable program of government services?

Of course, what’s “reasonable” is a fluid term. By Alberta Progressive Conservative standards, all of the U.S. and all of Canada are “unreasonable” in what their people pay, for what they get in stable government services.

I guess they must be, from the perspective of an Alberta Tory.

Why make the tax increase specific to health care? Health care is the largest (and rising) portfolio in the province’s program budget. So maybe it makes sense that tax increases be specific to the most expensive services government provides.

But that would mean some steep cuts in all other aspects of Alberta’s social safety net, while the big shots in Alberta Health Services don’t have to face the same hard decisions.

I say if my taxes are going up (big time) for only one program, I want to see some performance guarantees. Actionable guarantees.

Nobody likes to read or hear about someone else’s health complaints, but I’ve been bumped from non-elective surgery three times in the last month. I’m sure I’m not the only person who can say this.

How many Albertans are walking around with a potential cancer inside them, who get booked for surgery over and over again, only to be sent home from the hospital because the surgery rooms ran out of time and need to close for the day? Quite a few, I’ll bet.

Now, raise my taxes 10 or 12 per cent — specifically for health care — and ask me to quietly accept it. No sale.

That’s why a sales tax makes more sense. We know everyone else in the world accepts and pays it, and they seem to live just fine. We know it’s a steady, stable revenue stream that exists outside the energy price cycle. And it’s a tax the rich actually pay.

A “reasonable” tax regime, and “reasonable” expectations of what those taxes should provide us, is a better way forward than keeping a flat income tax with another flat health-care tax plopped on top it.

People keep saying Prentice is the steady hand on the tiller that Alberta needs. What I see is a guy veering all over the place in an effort to avoid the decisions a reasonable leader needs to make.

Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email greg.neiman.blog@gmail.com.