Alberta politicians need to be honest about sales tax

The next time you want to berate a politician for lying, think about the price they pay when they serve the truth straight up.

Such is the case with Alberta’s Finance Minister Ted Morton, who found himself knee deep in a barnyard for simply refusing to feign shock and horror on cue at the idea of a provincial sales tax.

Morton is charged with managing finances in a province where resource revenue has provided a long and profitable free ride. Those revenues have helped Alberta remain a PST holdout. But with conventional resource revenue in steep decline, and the economy in a protracted recession, Alberta is forecasting a $4.8-billion deficit.

After Morton provided reporters with an update on Wednesday, he was asked what options are being considered to deal with this financial threat. Everything, Morton affirmed. He said the government wants to come up with a long-term solution to erratic oil and gas revenues, and the Premier’s Council for Economic Strategy is examining tax options as part of that discussion.

Would you rule out a provincial sales tax, he was asked? Morton explained the government has no intention “for the time being” of imposing any such tax – honest words, but also enough rope to see him hanged next day in the province’s daily newspapers.

“Sales tax on table in Alberta,” reported a Calgary newspaper.

“Morton doesn’t rule out provincial sales tax,” screamed the Edmonton

Sun.

Opposition parties quickly seized the opportunity to make (modest) political hay.

“We don’t have a revenue problem. We have a spending problem,” cracked Liberal MLA Hugh MacDonald.

“They’ve got to get their spending under control,” fumed Wildrose Alliance leader Danielle Smith. “This is not going to be resolved by just loading up new taxes on Albertans.”

Now, let’s look at his exact words. Morton said: “Albertans are rather happy with the fact, and even proud of the fact, that there isn’t a sales tax in this province. And for the time being this government doesn’t have any intention of changing that.”

That may not be the easiest, or most politically expedient answer, but it is the only honest one.

The easiest answer would have been to say, “Read my lips,” or “Over my dead body,” which is basically what Premier Ed Stelmach’s office said the next day in a bid to limit the political fallout. After all, a provincial sales tax is anathema and any government that tries to impose it could very well be signing its own death warrant. (Under current law, it could only be imposed following a province-wide referendum.)

But, as easy and rewarding as it would be to utter those words, it would also be somewhat dishonest. The simple truth is that if the economic cards do not fall Alberta’s way, new taxation may be the least worst option.

Certainly, the opposition is right to point out that the incumbent Progressive Conservatives have been wasteful in their spending. One has to wonder what state this province would be in today, if only its government had handled those billions of dollars in precious royalties more prudently during the boom of the late 1990s and early 2000s.

The same opposition politicians are less right – in fact, downright disingenuous – when they assert that cost controls alone will solve our $4.8-billion problem. Alberta has a seemingly endless list of infrastructure needs; its educational institutions are financially besieged and health care is a monster with an insatiable appetite for cash. It is an inescapable fact that Alberta needs more money than it’s taking in right now to function as a modern province.

It might come as a surprise that some economists actually think a sales tax would be a good thing for Alberta. In 2009, Jack Mintz, head of the School of Public Policy at the University of Calgary, said a PST of – say – eight per cent would be OK, if the revenue was used to reduce personal and corporate taxes.

Now, if voters want to be anesthetized by hollow assurances from politicians who know they can’t keep their promises, then people like Morton should give up and tell them what they want to hear. Benign ignorance is just another way of forsaking our democratic rights and obligations.

If, on the other hand, we want to reward candor, then we have to stop punishing politicians who decline to deceive. Refusing to rule out a PST doesn’t mean we have to have one; it just helps Albertans understand the depth of our current economic ills.

That’s worth talking about – honestly.

Doug Firby is Managing Editor of Troy Media Corporation.

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