If Alberta taxed like other provinces, it would have a huge budget surplus

[blackpowder]

Yes indeed, if we had the highest tax rates in Canada our deficit would be gone. Or would it??
Doesn't seem to make anyone else in Canada debt free. Norway like taxes and you still can't spend more than you make.
There still has to be an income to tax.
We'd have likely just payed more in transfer anyway.
Bringing everyone's income and incentive down to the lowest level only makes socialists feel righteous until they're hungry.
Every govt in recent memory has kicked all these cans down the road and it's come to this.
Chuck thinks he has the answers but I suspect he's wrong again.

[AlbertaFarmer5]

The socialists from outside of Alberta on Agriville have some very strange fixation on AB economics, fiscal policy, energy, and the oil and gas industry, while apparently having no connections to them, or knowledge thereof.

This would be the equivalent of one of us Albertans making every second post about the fishing industry of Newfoundland, and they should manage their economy around that, having never stepped foot on a fishing boat, or been to Newfoundland, but not letting that stop us from being the foremost expert on the subject.

Apparently they have already solved all of their problems at home, and have moved on to solving problems in the rest of the country.

[furrowtickler]

https://www.theglobeandmail.com/opinion/editorials/article-if-alberta-taxed-like-other-provinces-it-would-have-a-huge-budget/ https://www.theglobeandmail.com/opinion/editorials/article-if-alberta-taxed-like-other-provinces-it-would-have-a-huge-budget/


If Alberta taxed like other provinces, it would have a huge budget surplus
Editorial
Published March 4, 2020
Updated 16 hours ago

In Alberta’s 2020-21 budget, on Page 169, there’s a chart that speaks volumes about the province’s fiscal dilemma.

Albertans, as the graphic titled “Alberta’s Tax Advantage” illustrates, pay the country’s lowest taxes. The chart lays out precisely how much less revenue the provincial government has, compared with other provinces, as a result of those low taxes. And what it shows is that, if Alberta had the tax code of Saskatchewan, British Columbia, Ontario or any other province, it would not currently be running a deficit. Instead, it would have a huge multibillion-dollar surplus.

This is worth remembering as the United Conservative Party government grapples with a wide fiscal gap, which it has chosen to try to bridge with spending cuts and a long-term plan to downsize government. Those are not illegitimate choices, nor has Premier Jason Kenney’s government hidden the fact that this is its road map.

But it is a choice. There are other roads available. And as that chart on Page 169 of last week’s budget points out, one of those roads has been taken by every other province.

Alberta has a long history as a low-tax, high-spending jurisdiction. That equation doesn’t sum in the rest of the country, but it does in Alberta, thanks to oil royalties. Oil allowed Alberta governments to tax like conservatives and spend like social democrats.

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For decades, that’s how the province operated, spending 100 per cent of its resource revenues, and sometimes more than 100 per cent, leading to deficits even in boom times.

To bring the equation back into balance, the Kenney government is focusing on spending cuts – while hoping for higher oil prices.

Alberta forecasts 2020-21 revenue of $50-billion, with a deficit of $6.8-billion. Three years from now, bolstered by an optimistic view of oil prices, revenue is supposed to reach $58.1-billion. Combined with spending restraint, the result is supposed to be a $700-million surplus.

But that will only happen if oil prices co-operate, and go up.

The UCP government believes resource revenues will surge to $8.5-billion by 2022-23, up $3.4-billion from 2020-21. Oil is also supposed to fuel higher personal and corporate income taxes, to add another $2.6-billion.

Underlying these numbers is a confident price forecast.

Among private forecasters, the average oil price a barrel in 2021 is US$59. The Alberta government predicts US$62. In 2022, the average private forecast is US$61. Alberta’s is US$63.

A dollar or two a barrel seems like nothing – but each dollar equals $355-million in Alberta’s budget. The gap between private forecasters in 2021 and the province would make for a $1-billion swing.

Alberta’s budget is a bet on everything going right for the province, and oil. Given volatile prices – the West Texas benchmark on Wednesday was around US$47 – that is one big bet. And the UCP’s sunny forecast extends across the economy, with the budget forecasting higher economic growth than the private sector through 2023.

Mr. Kenney’s government may be right. Oil may save Alberta yet again. But if oil falls short, deeper spending cuts are on the horizon.

The cuts are already sizable. Health care spending in 2022-23 will be about 1 per cent lower compared with 2019-20. Factor in a growing population and inflation, and that’s a substantial cut. Education spending will be cut 4 per cent by 2022-23. All told, Alberta plans to cut operating spending by about 2 per cent over the next three years.

These are all legitimate choices, made by an elected government. But spending cuts, and prayers for crude, are not the only options.

As the Alberta budget helpfully points out, if Alberta had the same tax system as Ontario – Canada’s second-lowest tax province – Edmonton would be bringing in an extra $14.4-billion this year. That would leave Alberta with a $7.6-billion budget surplus. If Alberta had Saskatchewan taxes, provincial coffers would take in an extra $15.1-billion. Copying B.C.’s tax system would yield an extra $17.5-billion.

To deal with Alberta’s budget deficit, Mr. Kenney’s government has largely treated higher taxes as a non-option. Instead, it has focused almost exclusively on spending cuts, served on a bed of expectations of higher oil prices.

It just might work, fiscally and politically. But it’s not the only option on the menu.
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How has the glorious taxation worked in Ontario, big budget surpluses there ?? Last time I looked they are more in debt per capita than almost anywhere on earth , maybe that’s changed lol

[LEP]

If it is such a great idea chuck why didn't the NDP raise taxes higher? They had 4 years to do it.

[ajl]

If the federal lieberals had continued the spending discipline of the Harper conservatives, they would have posted a couple of budget surpluses these past 4 years.

[AlbertaFarmer5]

If the federal lieberals had continued the spending discipline of the Harper conservatives, they would have posted a couple of budget surpluses these past 4 years.

But, how do you buy votes, influence, patronage and friends in high places doing that?

[sumdumguy]

More like friends in low places👇🏿

[Hamloc]

I am probably one of the few on here that supports a sales tax in Alberta. My reason is very simple, I think the majority of non renewable resource revenues should be put into savings. The only way this is possible is to increase other forms of revenue coming into the government. Now I fully appreciate the arguement that increased taxes do not necessarily lead to a balanced budget. Quebec is an interesting example, one of two provinces in Canada with a balanced budget. You could argue that heir high income tax rates and their 9.75% sales tax prove that you can tax to balance. That is all well and good until you add in the $13 billion they recieve from federal equalization which is roughly 12% of their provincial budget. A federal equalization fund that receives a good portion from federal income taxes collected in Alberta, a province with one of the highest average per capita incomes in the country. Without federal equalization Quebec would be running a sizeable deficit. Getting back to Alberta, a sales tax would in my opinion would create a more stable revenue stream to the Alberta government and hopefully one that is less dependent on the price of oil.

[jazz]

I am probably one of the few on here that supports a sales tax in Alberta.

This is the reason to support a sales tax, not chucks idea which is just more socialism. If the Ab govt can diversify its revenue stream and get more dollars from other areas than personal taxation, they can then lower those personal tax rates, dropping everyone down a bracket or two (along with the fed portion) thus starving Quebec of equalization.

This is the reason for Ab to start its own APP, bring that cash home, invest it income producing ventures, get lower premiums for Albertans, start a modest sales tax and then drop those personal taxes to the bone. You will ignite an investment fire in that province if that happens. People from other parts of Canada will flood in just to take advantage of the lower premiums.

[AlbertaFarmer5]

Aside from the benefits that Hamloc and Jazz point out, i support a sales tax replacing an income tax because a sales tax is somewhat voluntary, and can be used to encourage or discourage certain behaviours, an income tax is involuntary, and purely punitive.

Income tax makes it nearly impossible to save money to start a business. Give the potential entrepreneurs of the province a chance to decide how they spend their income, instead of confiscating it before they get the chance.