Albertans have recently heard Premier Redford and her ministers reporting on the lower income position of the Alberta government.
There has been no mention of the specific actions they will be taking to balance the budget, while there have been repeated statements saying there will be no new taxes. This leaves concerns that the shortfall will be used as an excuse to reduce education and health care and human services funding.
The 2012 Premier’s announcement of poverty reduction strategies and the merger of several departments into human services have been positive changes. The present downturn in income from resources must not give rise to a return to past policies of cutting funding for education and healthcare.
Having used the 2012 Alberta Government online budget tool, http://www.budgetchoice.ca/2012/index.php?s=r I believe a 2% integrated harmonized provincial sales tax (excluding food and heating fuel) is fair, and the 10% flat tax should be replaced by a progressive and graduated income tax.
The Environics Institute ‘Income inequality and tax fairness’ report gives good advice. It can be found at http://www.taxfairness.ca/sites/taxfairness.ca/files/resource/keith_neuman.pdf.
Although the report is on the nation-wide Canadian perspective, there are similarities and differences for the province of Alberta.
Due to large but fluctuating income from resource industries the province has been shielded from the need to come to terms with sufficient tax income and tax-fairness. Ideological anti-tax rhetoric has been continually used by the present and past government to stay in power.
The 10% flat tax was introduced to further that policy.
A more positive approach would be to look at graduated taxation and tax fairness, putting our province’s income on a more stable footing while allowing resource income to flow to the Heritage fund.
Premier Redford should use the support given by progressive voters at the 2012 election to build a fairer, more ethical tax system and budget.