Budget penalizes taxpayers

There are enough conflicting messages contained in the Alberta budget to leave the average taxpayer dazed and confused for a week.

There are enough conflicting messages contained in the Alberta budget to leave the average taxpayer dazed and confused for a week.

And even when taxpayers have sorted through the maze of spending plans announced by Finance Minister Iris Evans, they likely won’t feel comforted.

Evans has offered up a budget long on uncertainty, short on stability and deep into the average Albertan’s pocket in one way or another.

And the potential exists for even more punitive plans down the road, if the Alberta economy continues to falter.

Basic economics teaches that spending is the engine of economic health and that the average consumer is responsible for firing that engine. In difficult times, when basic consumer activity won’t sustain the economy, spending declines, followed quickly by job losses.

At that point, either governments step in to stimulate spending (giving tax breaks or creating jobs by funding public and private projects, either through grants, low-cost loans or tax breaks), or the economy spirals. Part of the commitment is maintaining public service jobs.

History says economies do rebound on their own, but not without significant, lengthy hardship for the average person, and after much restructuring. That’s not what Canadians want or expect from their governments. They want strong, supportive economic leadership in good and bad times.

So why has the Conservative government of Alberta introduced its most punitive budget in a decade?

In the wake of 10 years of surplus budgets, let’s examine the tax increases, either contained in the budget, implied, or introduced in the weeks leading to its delivery:

• Education property taxes will rise significantly in all communities, as determined by the school boards in question. In Calgary, for example, that’s a 6.7 per cent hike for the average homeowner. How is that tolerable in communities where job losses are building, wages are being frozen or rolled back and future opportunities are disappearing?

• The province recently cancelled its natural gas rebate program, taking millions of dollars out of consumers’ hands.

• A previously announced municipal funding agreement will be trimmed by as much as $200 million. If municipalities want to retain these projects, they’ll have to fund them through their own debt, and ultimately by raising municipal taxes.

• Both alcohol and tobacco taxes will increase (not always a bad thing, but there is no evidence that this increased revenue will actually go to address alcohol and tobacco dependency issues).

In addition, some projects and services are being delayed or derailed:

• Several health construction projects, including the Lacombe continuing care-dementia care project.

• No new school construction, at least in Central Alberta.

• Chiropractic services will no longer be covered under the Alberta health plan.

• Wild Rose Foundation charity funding will be cut or redirected, making it more difficult for charitable groups to fund projects — and forcing them to go back to the public for yet more money, or constrict vital services.

Now consider the dire consequences if oil royalty revenue continues to slump: a projected $4.7-billion deficit this year continues to build, even though the new legal spending ceiling is the $7-billion sustainability fund.

Certainly there are some initiatives in the budget, for select communities.

But too much uncertainty remains — $215 million in government spending cuts this year and a further $2.2 billion if revenues don’t rebound.

For too long, Alberta gambled on the energy sector and won — and the mentality seems to have stuck. The provincial government’s new budget seems to mistake another roll of the dice for leadership.

John Stewart is the Advocate’s managing editor.

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